The AICPA is
committed to evaluating how well SAS No. 82, Consideration
of Fraud in a Financial Statement Audit, is meeting the
Auditing Standards Board's (ASB's) objectives. This commitment
was established in the exposure draft of SAS No. 82 issued in
May 1996 whereby the ASB noted that it will "develop a
process to obtain feedback on the new standard periodically to
assess how well it is accomplishing its objectives and to
identify further steps that need to be taken. This feedback
process should be helpful in defining further research on
fraud deterrence and detection."
Request for Proposal is designed to stimulate research on the
effects of SAS No. 82 on audit practice, including evidence
about the improved effectiveness of an audit of financial
statements in detecting material misstatements due to fraud.
The AICPA will facilitate access to audit firm data for
Objectives of the Research
The ASB seeks
proposals for research relevant to two broad objectives. The
first objective is to provide research to assist the ASB in
its assessment of the effectiveness of SAS No. 82. The second
objective is to provide research to assist the ASB in its
efforts to continually improve SAS No. 82 related guidance by
addressing how emerging business and technology trends affect
the process of detecting material financial statement
misstatements due to fraud.
issues related to the ASB's objectives might include questions
- How has the fraud
risk assessment information obtained and considered by the
auditor affected the manner in which the audit is executed?
To what extent have auditing procedural methods been
affected by the auditor's mandated fraud risk assessment
process? What changes can be made to improve the auditor's
response (via changes to the auditor's plan) to the fraud
risk assessment once that assessment is complete?
- How have the
requirements of SAS No. 82 affected the auditor's behavior
and mindset? How has the process of making a formal
assessment of the risk of material misstatements due to
fraud affected the auditor's level of professional
- How complete and
discriminating are the fraud risk factors, which are
included in SAS No. 82? Are there factors currently in SAS
No. 82 that distract the auditor from recognizing the
presence of material misstatements due to fraud? Is there a
basis for weighting or combining various fraud risk factors
during the fraud risk assessment process?
- How are new
technologies changing the risk that financial statements
contain material misstatements due to fraud? What new
opportunities for fraud are created with the implementation
of new technologies? What new technologies implemented by
client management are improving the prevention and detection
- How can
analytical procedures be designed and implemented to
increase the accuracy of the auditor's fraud risk assessment
process? How is technology being used to increase the
auditor's accuracy when developing expectations about
financial statement account balances?
- What effect has
the fraud risk assessment information had on the audit
firm's business risk management processes? Has information
obtained in the fraud risk assessment process affected
client acceptance and retention decisions? How have the SAS
No. 82 requirements affected the assignment of personnel on
the audit team and the workpaper review process? How has SAS
No. 82 affected auditor training?
This list of
potential research questions is designed to provide direction
and to stimulate the identification of further research
questions. It is not designed to be all-inclusive. A research
proposal does not need to address both of the ASB's broad
objectives to be acceptable.
The AICPA expects to
have the support of several auditing firms who are willing to
provide access to firm data and personnel for the selected
research project(s). All types of research methodologies are
acceptable (i.e., archival, behavioral, experimental,
theoretical, analytical, etc.). The proposal should contain a
full description of the proposed methodology.
The ASB seeks to
have the research completed and preliminary results summarized
for their consideration by early part of the year 2000.
Therefore, research proposals should reflect methodologies
that can be conducted during the spring, summer, and fall of
1999 to ensure the delivery of the preliminary research
findings by early 2000.
of Research Results
provide a summary of the results for the ASB by the early part
of the year 2000 that is tailored more for an audience of
professionals than an academic journal audience. Details
concerning publication of the research results can be
determined by mutual agreement with the researchers after
selection of the RFPs.
Proposals should contain the following information:
background theory and prior empirical research related to
the proposed research question(s).
hypotheses and related research methodology that will be
used to test the hypotheses.
requirements, including how confidentiality will be
preserved as required.
- Discussion of how
the research will address the ASB's two broad objectives
related to the effectiveness of SAS No. 82 and the continual
improvement of guidance related to SAS No. 82.
- Timetable with
various milestones to ensure completion of research by early
- Brief statements
of particular qualifications of the researcher(s) which
relate to the requirements of the project.
anticipates funding up to $15,000 as a stipend for each
selected project in addition to providing reimbursement for
reasonable out-of-pocket expenses. Research proposals should
include estimates of out-of-pocket expenses that would be
associated with the particular research methodology proposed.
For example, if the research methodology involves examination
of selected audit workpapers in practice offices, the proposal
should indicate the anticipated travel costs associated with
conducting that type of examination. In the event that a
proposal is selected, but the total support requested is not
available (e.g., stipend, out-of-pocket expenses, or auditing
firm support), the applicant will be contacted concerning
willingness to conduct a study modified in those terms.
must be submitted by February 1, 1999 to:
Technical Manager, Audit and Attest Standards
American Institute of Certified Public Accountants
1211 Avenue of the Americas
New York, NY 10036-8775
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