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Process for Issuance of SASs

These all need to be based on the United States.

1. What are SASs, and what is the process for their issuance?
2. Under common law, a CPA may be liable to a client. Explain how an auditor may breach a contract.
3. Identify how the Sarbanes-Oxley Act of 2002 changed the audit environment for auditors.
4. What is the overall objective of the financial statement audit?
5. Explain what is meant by understanding the entity's industry, regulatory environment, and other factors and explain how the auditor uses this knowledge in understanding the risk of material misstatement.

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1) What are SASs, and what is the process for their issuance?

SAS, or Statements of Auditing Standards, are maintained by the Auditing Standards Board of the AICPA. They direct external auditors of non-public entities on Generally Accepted Auditing Standards (GAAS), much like SOX and the Public Accounting Oversight Board watches over the auditing standards of publicly traded companies. SAS's are statements, interpretations, and guidelines that CPA's must adhere to when auditing and attest to the work on financial statements of non-publicly traded entities.
Also, and from the Operating Procedures of the Auditing Standards Board "The operating procedures of the ASB are designed to permit timely, thorough, and open study of auditing, attestation, and quality control issues and to encourage broad public participation in the process of establishing and improving auditing, attestation, and quality control standards." See reference.
The ASB discusses matters of significance to the industry, encourages broad participation and research on current and potential future auditing issues. With that information, they examine whether to adopt a new auditing ...

Solution Summary

This solution discusses the process for issuance of Statements of Auditing Standards.