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Journal entry — CAQ issues new audit alerts summarizing potential risk areas

Published on: Oct 13, 2015

Yesterday, the Center for Audit Quality (CAQ) issued CAQ Alert No. 2015-07, which consists of two alerts: (1) Select Auditing Considerations for the 2015 Audit Cycle (the “audit alert”) and (2) a companion alert, Select Considerations for the 2015 Audit Cycle for Brokers and Dealers (the “broker-dealer alert”). The audit alert and the broker-dealer alert discuss topics that were highlighted in the PCAOB’s October 2015 and August 2015 staff inspection briefs, respectively.

Topics discussed in the audit alert include:

  • Professional skepticism.
  • Internal control over financial reporting.
  • Risk assessment and audit planning.
  • Supervision of other auditors and multi-location audit engagements.
  • Testing issuer-prepared data and reports.
  • Cybersecurity.
  • Revenue recognition.
  • Auditing accounting estimates, including fair value measurements.
  • Related parties and significant unusual transactions.

Topics discussed in the broker-dealer alert include:

  • Staff inspection brief.
  • Independence requirements.
  • Revenue recognition.
  • Engagement quality review.
  • Related parties.
  • Reliance on records and reports.
  • Auditing accounting estimates, including fair value measurements.
  • Supplemental information accompanying financial statements.
  • Customer protection rule.
  • Audit documentation.

For additional information, see the press release on the CAQ’s Web site.


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