Risk Assessment Standards in Action

By Paul Kiel, Jennifer Carney, Carla A. Gogin and David A. Johnson

january 2008

ight standards rolled out in 2006 by the Auditing Standards Board are sparking a cultural shift for auditors.

The standards—Statement on Auditing Standards nos. 104–111—are designed to enhance auditors’ responses to audit risk and materiality and encourage them to focus on areas with the greatest risk of misstatement. The standards are effective for audits of private company financial statements for periods beginning on or after Dec. 15, 2006.

The JofA asked partners at three accounting firms to write about how the new guidance has affected their work. In their first-person accounts, beginning below, the partners share their experience with putting the guidance into action and offer practical advice for tackling some of the common challenges of implementation.