Deficiencies in the auditor’s risk assessment procedures are a common issue identified by practice monitoring programs in the United States and worldwide. In 2020 U.S. peer reviews, the currently effective AU-C section 315, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, was the leading source of matters for further consideration.
In October 2021, the AICPA Auditing Standards Board (ASB) issued Statement on Auditing Standards No. 145, Understanding the Entity and Its Environment and Assessing