SAS Nos. 104-111: Meeting the Mandate for Tighter Audit Processes

Assuring Compliance and Preventing Financial Statement Errors

Recording of a 100-minute CPE webinar with Q&A

Conducted on Thursday, January 15, 2009

Program Materials

This seminar will offer the real-world experiences of accounting profession veterans who will review the intent and nuance of every material portion of SAS Nos. 104-111 for audit staff seeking to improve compliance and reduce errors.


Auditing firms continue to wrestle with how to best assess risk of material misstatements in clients' financial statements under the AICPA’s Auditing Standards Board's Statements on Auditing Standards Nos. 104 through 111.

Given those statements and with SAS 112 on how auditors should communicate deficiencies to clients, the landscape of financial statement audits has been redrawn over the last year. Generic audits by accounting firms will no longer pass muster in this tougher regulatory environment.

At this point, auditors know the letter of SAS Nos. 104-111. However, specific examples of how the standards have been implemented to produce a successful audit are very valuable to working within these very relevant, still-hot topics.

Listen as our panel of accounting profession veterans gives your audit staff the intent and nuance of every material portion of SAS Nos. 104-111 and real-world experiences.



  1. Review Of Key Terms Of SAS 104-111 And Background History
    1. Evolution of emphasis on risk-based audits
      1. Principal objectives of SAS 104-111
        1. More comprehensive understanding of entity as whole
        2. Based on that understanding, auditor can comprehensively assess where risks lie
    2. Discussion of all key terms of SAS 104-111
      1. SAS 104
        1. Expanding on definition of reasonable assurance
      2. SAS 105
        1. Expanding auditor’s responsibility to gain understanding of internal controls
      3. SAS 106
        1. Emphasize duty to gain sufficient audit evidence
      4. SAS 107
        1. Incorporating assessment of risk into financial statement audit
      5. SAS 108
        1. States of planning, conducting the audit
      6. SAS 109
        1. Understanding the entity and its environment, including internal controls
        2. Evaluating entity, its industry, financial performance, other factors
        3. Five components of internal controls
      7. SAS 110
        1. Obtaining sufficient audit evidence through application of substantive audit procedures
      8. SAS 111
        1. Application of sampling procedures to controls tests
  2. Experiences In Transition to SAS 104-111
    1. Common surprises and bumps in road
    2. Certain auditor comments, insistence on documentation of certain controls
    3. Why certain longstanding client activities must be listed in management letter
    4. Citing activities that can’t be proved in management letter
    5. Related issuance of SAS 112 letters
      1. Due to more in-depth analysis of controls
    6. Auditors having to undertake certain activities during audits that clients will never see
  3. A Look Forward
    1. IAASB clarity project
      1. Creating outcome-oriented objectives for each standard
    2. ASB clarity project
      1. Revision of U.S. GAAS, with same objective as for ISAs
    3. What seems reasonable to expect in out-years of SAS 104-111
      1. Further testing and improvements
      2. Client demands other than addressing management comments
      3. Cost to accounting firms in time and expense


The panel will give you a more strategic understanding of the new standards and of what you’ll need to do with respect to: 

  • Understanding the client’s environment and internal controls
  • Assessing the risks of material misstatements in financial statements
  • Crafting procedures that appropriately respond to the risks
  • Improving your documentation between the assessed risks and audit procedures


Craig Funkhouser
Craig Funkhouser
Crowe Chizek and Co.

He runs the firm's Assurance and Financial Advisory Services Practice and also supervises audits involving manufacturer...  |  Read More

Ken Goldmann
Ken Goldmann
Partner, Director of Capital Markets and SEC Practice Group
J.H. Cohn

He has more than 35 years of public accounting experience and serves clients in the high-tech, manufacturing,...  |  Read More

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