Statement on Auditing Standards No. 104 - No. 111 Risk Assessment Standards

Gain a better understanding of how the risk assessment standards affect audit practice.

In the 1990s, the auditing profession was affected by several allegations of audit failure. In response, the auditing profession looked into ways to improve the audit process. That led to a very extensive study that recommended, among other things, that the Auditing Standards Board (ASB) of the AICPA undertake a project to address issues with respect to assessing and responding to the risks of material misstatement (whether caused by error or fraud). This project culminated in the issuance of SASs 104-111, often referred to as the suite 'risk assessment standards.' Collectively, the risk assessment standards establish standards and provide guidance concerning the auditor's assessment of the risks of material misstatement (whether caused by fraud or error) in a non-issuer financial statement audit; design and performance of tailored audit procedures to address assessed risks; audit risk and materiality; planning and supervision; and audit evidence.