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A88279 1 (2009-05-29)

handle is hein.gao/gaobadvuc0001 and id is 1 raw text is: im T I IAccountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 May 29, 2009 Ms. Sherry Hazel Audit and Attest Standards American Institute of Certified Public Accountants 1211 Avenue of the Americas New York, New York 10036-8775 Subject: AICPA Auditing Standards Board (ASB) January 2009 Exposure Draft for a proposed Statement on Auditing Standards (SAS) entitled Consideration of Fraud in a Financial Statement Audit (Redrafted) This letter provides the U.S. Government Accountability Office's (GAO) comments on the ASB's proposed SAS on the auditor's consideration of fraud in a financial statement audit. Generally, we support the proposed statement and agree that the principles-based approach used in this standard will permit the flexibility needed in this critical area. Our responses to the questions raised in the related Explanatory Memorandum are noted below. In addition, we are providing comments on retaining a separate fraud risk standard and the need for additional guidance related to third party fraud. Responses to Questions on Application of the Clarity Conventions and Converging with International Standard on Auditing (ISA) No. 240 (1) We believe that the objectives stated in the proposed SAS to be achieved by the auditor are appropriate. (2) We agree with the revisions made to the existing standard to converge with the ISA. (3) We agree with the differences between the proposed SAS and ISA 240. (4) We agree with the governmental considerations included in the proposed standard, and we recommend including additional special considerations for audits of governmental entities to provide further guidance on fraud risks that relate to government entities. In the attachment to this letter we propose wording for these additional considerations.

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