The Auditor's SAS Field Guide 2000. - Review - book review

Furthermore, the pages dedicated to analytical procedures and evidential matter will be helpful in planning and executing engagements, as well as designing substantive procedures to achieve an audit's objectives. The guide describes the use of analytical procedures during the planning phase, as part of the overall review, and as a substantive test.

Moreover, in addition to detailing the basic requirements of evidential matter, the guide provides insight on selecting substantive tests, testing underlying accounting data, testing to develop corroborating information, and evaluating evidential matter, as well as general guidance on the competency and sufficiency of evidence.

Audit sampling standards set in SAS 39 "Audit Sampling" is yet another fundamental concept covered by the guide. At a high level, the authors examine sample selection, stratification, unexamined sample items, sample size, projection and aggregation of misstatements, and qualitative aspects of sampling.

A few sections of the guide are dedicated to account-specific audits, such as inventory and investments. The guide does an exceptional job of dictating the required procedures. For example, the discussion on SAS 81, "Audit Investments," offers specific advice on determining existence, ownership, and completeness of the investment balance. Insight on valuation and presentation of investments is provided, as well. Also, explicit guidance is included on evaluating investment impairment conditions.

A discussion of SAS 65, 'The Auditor's Consideration of the Internal Audit Function in an Audit of Financial Statements," is the quintessential point in developing a cohesive cosourced audit function and achieving efficiencies in the financial statement audit. The guide details the basic requirements of the SAS and provides guidance on assessing the internal auditor's competence and objectivity and on evaluating and testing the effectiveness of the auditor's work.

To that end, the guide is extremely useful in aligning the internal audit function with the financial statement audit. When the guide is followed, financial statement auditors could essentially rely on the control work of the internal auditors, thereby significantly reducing the amount of substantive testing needed.

I recommend keeping the guide in your briefcase for quick reference to the standards that you strive to uphold in every engagement.

JENNA CALDWELL is a senior auditor in Ernst and Young's Assurance and Advisory Business Services Group in San Francisco.