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PCAOB Proposes Changes to Risk Standards

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Risk assessment is key to a quality audit, according to a Reuters article published in Guardian Unlimited. And in an effort to turn more auditors toward the risk-based internal controls audits that the Securities and Exchange Commission had in mind when it adopted new Sarbanes-Oxley 404 implementation guidance last year, the Public Company Accounting Oversight Board has proposed several new risk assessment and risk response standards.

 

According to Reuters, there are seven proposed standards that cover "everything from the way auditors identify the risk of errors in company financial reports to how they judge which transactions are riskier than others." The PCAOB says the proposed changes should mean more efficient and expanded use of risk-based audits.

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