Risk Assessment Under SAS No. 145

Overview

Get familiar with SAS No. 145

In October 2021, the AICPA Auditing Standards Board issued Statement on Auditing Standards (SAS) No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement.

SAS No. 145 does not fundamentally change the key concepts underpinning audit risk. Rather, it clarifies and enhances certain aspects of the identification and assessment of the risks of material misstatement to drive better risk assessments and, therefore, enhance your audit quality.

Hear from members of the Auditing Standards Board's risk assessment task force as they help you learn to navigate SAS No. 145 and examine new and updated concepts including:

• A new definition of significant risk
• New guidance on maintaining professional skepticism
• Revised requirements to evaluate the design of certain controls
• Separately assessing inherent risk and control risk
• Revised requirements regarding audit documentation
• New guidance on scalability

Prerequisites

None

Objectives

• Recall why risk assessment is important.
• Recognize the areas where practitioners may struggle.
• Identify the major differences in risk assessment under SAS No. 145 and why they were incorporated by the Auditing Standards Board.
• Recognize the practical impact to the risk assessment process and the work to be performed.

Highlights

• Risk assessment under SAS No. 145
• Overview of the steps to perform during risk assessment
• Testing the design, implementation, and operating effectiveness of controls
• New concepts due to the issuance of SAS No. 145