Understanding and Using the New Standard
This article summarizes the provisions of SAS No. 99, Consideration of Fraud in a Financial Statement Audit, which is effective for audits of financial statements for periods beginning on or after December 15, 2002, with an emphasis on the newly introduced provisions.
The most noteworthy changes in the new standard are as follows:
* Required planning discussions among audit team members concerning fraud risks, as well as heightened professional skepticism;
* Expanded inquiries of management and others to identify material fraud risks;
* Acknowledgment of attitude and rationalization as a third condition usually present when fraud occurs;
* Broadened guidance for assessing risks of material misstatement due to fraud;
* Expanded guidance on revenue recognition fraud risks; and
* Procedures to address the risk of management override of internal controls.
See full Article.
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