TOP AUDITING ISSUES FOR 2013 - CCH

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TOP AUDITING ISSUES FOR 2013 CPE COURSE
The requirement for audit organizations to develop policies to address
requests by outside parties for access to audit documentation has been
deleted.
A consideration that auditors may follow for early communication of
deficiencies has been added.
DEFINITIONS
The new Yellow Book defines the following terms that are relevant to
performance audits:
Abuse
Abuse is behavior that is deficient or improper compared to behavior that a
prudent person would consider reasonable and necessary business practice
given the facts and circumstances.
Appropriateness
Appropriateness is the measure of the quality of evidence. It encompasses
the following elements that are used for addressing audit objectives and
supporting findings and conclusions:
Relevance
Relevance refers to the extent to which evidence has a logical relationship
with, and importance to, the issue being addressed.
Validity
Validity refers to the extent to which evidence represents what it purports to
represent. That is, the extent to which it provides a reasonable or meaningful
basis for measuring what is being evaluated.
Reliability
Reliability refers to the consistency of results when information is measured
or tested. It includes the concepts of being verifiable or supported.
Audit Risk
Audit risk is the possibility that the auditor’s findings, conclusions,
recommendations, or assurance may be incomplete or improper, as a
consequence of such factors as insufficient or inappropriate evidence,
inadequate audit process, or intentional omissions or misleading information
as a result of fraud or misrepresentation.