Sas 99

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The new fraud standard, Statement on Auditing Standards no. 99, Consideration of Fraud in a Financial Statement Audit, is the cornerstone of the AICPA’s comprehensive antifraud and corporate responsibility program. The goal of the program is to rebuild the confidence of investors in our capital markets and reestablish audited financial statements as a clear picture window into corporate America. SAS No. 99 requires you to gather and consider a great deal of information to assess fraud risks. SAS 99 defines fraud as an intentional act that results in a material misstatement in financial statements. An audit requires due professional care, which in turn requires that the auditor exercise professional skepticism. Requires ‘brainstorming’ sessions to discuss how and where the entity’s financial statements might be susceptible to material misstatement due to fraud. The first objective is so the engagement team will have an opportunity for the seasoned team members to share their experiences with the client and how a fraud might be perpetrated and concealed. The second objective is to set the proper “tone at the top” for conducting the engagement. The brainstorming session is to be conducted in a manner that models the proper degree of professional skepticism and sets the culture for the entire audit. Requires the auditor to gather information necessary to identify risks of material misstatement due to fraud by the following * Making inquiries of management and others within the entity * Considering the results of analytical procedures performed in planning the audit. * Considering fraud risk factors.

* Considering certain other information
SAS 99 requires auditors to ask management questions and make a decision as to whether they need to ‘educate’ management about fraud and the types of controls. The standard also requires auditors to make inquiries of the audit committee, internal audit personnel and others within the entity. Requires the auditor to...
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