PCAOB Adopts New Risk Auditing Standards

The Public Company Accounting Oversight Board approved eight auditing standards meant to help auditors assess and respond to material misstatement risks in financial statements. AS No. 8 pertains to audit risk, AS No. 9 relates to audit planning, AS No. 10 addresses supervision of audit engagement, and AS. No. 11 describes consideration of materiality in planning and performing an audit. The other four standards, AS No. 12, 13, 14, and 15, respectively pertain to identifying and assessing risks of material misstatement; the auditor’s response to the risks of material misstatement; evaluating audit results; and audit evidence. If the Securities and Exchange Commission approves the new standards, they will take effect for fiscal periods beginning on or after December 15, 2010.