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New Auditing Standards: SAS Nos. 142-145

Exam Questions: 20
Course Level: Basic
Pages: 146 | Content: 134, Supplemental: 12
NASBA Area of Study: Auditing
Not Acceptable for: Enrolled Agents
Version: 8090

The objective of this course is to address the new auditing standards issued by the Auditing Standards Board as SAS Nos. 142-145. The first segment of the course addresses SAS No. 142's expanded guidance on what comprises audit evidence in a financial statement audit. Topics include: evaluating audit evidence; testing audit evidence; relevance and reliability of audit evidence, including its source; susceptibility to management bias; corroborative or contradictory information; evaluating whether information is sufficiently precise and detailed for the auditor's purposes; and use of automated tools and techniques. The second segment is a review of SAS No. 143's guidance on accounting estimates, including the degree of estimation uncertainty; risk assessment procedures related to accounting estimates; identifying and assessing the risks of material misstatement, including responses to the assessment; indicators of possible management bias, and more. The third segment consists of a review of SAS No. 144's changes to auditing standards in connection with use of specialists (management and auditor specialists) and use of price information obtained from external sources. The final section addresses significant changes made by SAS No. 145 to the auditor's understanding of an entity and its environment and the assessment of risks of material misstatement. PLEASE NOTE: Not accepted for Enrolled Agents. All course material provided. No prerequisites. Course level: Basic.

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Course Information

Table of Contents
  • SAS No. 142: Audit Evidence
  • SAS No. 143: Auditing Accounting Estimates and Related Disclosures
  • SAS NO. 144: Amendments to AU-C 501, 540, and 620 Related to the Use of Specialists and Use of Pricing Information Obtained from External Information Sources
  • SAS No. 145: Understanding the Entity, Its Environment, and Assessing the Risks of Material Misstatement
Objectives
  • To identify an example of an attribute of information obtained as audit evidence
  • To recognize actions an auditor should perform in evaluating information used as audit evidence
  • To recognize attributes of information to be used as audit evidence
  • To identify an attribute that affects the reliability of information used as audit evidence
  • To recall functions on which an auditor can use automated tools and techniques
  • To identify an example of an accounting estimate related to classes of transactions, account balances, and disclosures identified in SAS No. 143
  • To recognize how inherent and control risks should be assessed in accordance with SAS No. 143
  • To recognize an example of an inherent risk factor
  • To identify examples of approaches that can be performed in assessing the risks of material misstatement from accounting estimates
  • To recall one of the amendments made to AU-C 501 by SAS No. 144 in connection with using the work of an external inventory-taking firm
  • To identify some instances in which an auditor may conclude that a specialist's work is not adequate
  • To identify a type of risk assessment procedure that an auditor can use in accordance with SAS No. 145
  • To recall examples of risk assessment procedures that an auditor may perform in SAS No. 145
  • To recognize how to perform risk assessment procedures when relying on information obtained from previous experience with an entity
  • To identify examples of risk assessment procedures to obtain audit evidence in accordance with SAS No. 145
  • To recognize a new requirement made by SAS No. 145 in connection with assessing inherent risk and control risk in an audit
  • To identify how an auditor should respond if the auditor does not plan to test the operating effectiveness of an entity's controls

PLEASE NOTE: CPE credit measurement is based on NASBA Registry and QAS guidelines of one credit for every 50 minutes. Credit calculation may vary in different states — check with your State Board of Accountancy. Unless otherwise noted in the specific course description, no advanced preparation is required in order to register or complete any PES CPE course. Use of materials or services provided by Professional Education Services, LP ("PES") are governed by the Terms and Conditions stated on PES' website www.mypescpe.com. PES provides these courses with the understanding that it is not providing any accounting, legal, or other professional advice and assumes no liability whatsoever in connection with its use. PES has used diligent efforts to provide quality information and material to its customers, but does not warrant or guarantee the accuracy, timeliness, completeness, or currency of the information contained herein. Ultimately, the responsibility to comply with applicable legal requirements falls solely upon the individual licensee, not PES. PES encourages you to contact your state Board for the latest information and to confirm or clarify any questions or concerns you have regarding your duties or obligations as a licensed professional.