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Generally Accepted Auditing Standards (GAAS) are Standards against which the quality of audits are performed and judged.  In the U.S., Standards are promulgated by the Auditing Standards Board (ASB), a division of the American Institute of Certified Public Accountants (AICPA).  Since the passage of the Sarbanes-Oxley Act of 2002 (SOX), the Public Company Accounting Oversight Board (PCAOB) has developed standards for publicly traded companies.  Sections 103(a)(2)(A) and 404(b) of the SOX Act directed the Board to establish Professional standards governing the independent auditor's attestation and reporting on management's assessment of the effectiveness of Internal Control Over Financial Reporting (ICFR).

Auditing Standard 2 (AS2) was the initial standard released to provide public accounting firms guidance regarding the requirements to comply with Sarbanes-Oxley. Due to the many difficulties faced by firms and issuers in the early years of compliance, the PCAOB released Auditing Standard 5 (AS5) in 2007 which superseded AS2.  AS5 was designed to provide clearer guidance and eliminate some of the questions that had plagued firms and companies through the initial years of attestation.  AS5 is the auditing standard currently used when complying with SOX.  However, it is important to have an understanding of AS2, it’s expectations and challenges be able to appropriately scope and understand the transition to AS5.  This course will provide an outline of both legislations and highlight the challenges and applications of the standards.  It is important for professionals to have a strong understanding of the concepts outlined in both auditing standards and the impetus for change that resulted in AS5.  This course is designed to provide a strong understanding of these concepts. 

Learning Objectives

  • Explore the background of the Sarbanes-Oxley Act of 2002 (SOX) and recognize the purpose of auditing standards
  • Explore Auditing Standard 2 (AS2)
    • Management assessment process,Top down approach
    • Fraud, Terms, Entity level controls and walkthroughs
  • Explore Auditing Standard 5 (AS5)
    • Key changes, Top down approach
    • Entity controls, Significant Accountants, Definitions
  • Explore the Next Phase - The 2013 Committee of Sponsoring Organizations (COSO) Framework
Last updated/reviewed: September 18, 2018

Included In Certifications

This course is included in the following Expert Certifications:

16 CoursesSarbanes-Oxley (SOX) Certification

  1. Sarbanes Oxley (SOX) Overview
  2. SOX: Authoritative Bodies
  3. The Evolution of Sarbanes-Oxley (SOX) Auditing Standards
  4. Information Technology in Today’s Digital World: General Controls Primer
  5. COSO 2013 Framework Requirements and Implementation Overview
  6. Sarbanes-Oxley (SOX) Section 404
  7. Sarbanes-Oxley (SOX) Section 302: Internal Controls over Financial Reporting
  8. Sarbanes-Oxley (SOX) Section 806, 902, 906
  9. Sarbanes-Oxley (SOX): Preparing for a Top Down Risk Assessment Part 1
  10. Sarbanes-Oxley (SOX): Executing a Top Down Risk Assessment Part 2
  11. Sarbanes Oxley (SOX): Entity Level and Soft Controls
  12. Sarbanes-Oxley (SOX) Identifying and Documenting Controls
  13. Sarbanes-Oxley (SOX) Testing
  14. Sarbanes-Oxley (SOX) General Controls, Applications Controls, and Spreadsheet Controls
  15. Sarbanes-Oxley (SOX) Difficulty of Assessing Material Impact
  16. XBRL - Connection to SOX 302/404 and Critical Roles

10 Reviews (49 ratings)Reviews

5
Anonymous Author
This is a really useful overview of how the auditing standard have evolved and therefore indicates how the relationship between the external auditors and the company the provide services will also have evolved.
4
Member's Profile
Good information and very detailed explanation of differences in AS2 and AS5. I feel though there was to much emphasis on AS2 and not enough on the true changes between AS2 and AS5
5
Member's Profile
Very informative. I'm surprised at how much more I need to learn about AS 5. All professionals, including auditing instructors will benefit here.
5
Member's Profile
Excellent - gave me a good understanding of SOX by providing the history and timeline of the changes.
4
Anonymous Author
This course discusses the background story of AS2 and AS5 as well as the transition to COSO ERM
4
Member's Profile
Good comparison of AS2 and AS5. Good background information to know.
4
Member's Profile
Again, easy to understand. Takes you through at a reasonable pace.
3
Anonymous Author
Nice overview of AS 5 and how it evolved from AS 2.
4
Anonymous Author
This course provided a lot of valuable information.
4
Anonymous Author
Very Informative

Prerequisites

Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course. 

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .

2 QuestionsCourse Questions and Answers

User picture

I work on the financial reporting side of accounting, so am taking your SOX courses to increase my SOX/audit knowledge. In this course you mentioned to look up evaluating financial statement line items. When I did that, it looks like the numbering system for the auditing standards was changed recently. I don't really understand the audit standards like I do the FASB codification, so it was kind of confusing for someone who hasn't worked with the standards before. It's still a good course but maybe a reference table could be provided.I did find the below table matching the old numbering system to the new system, but still not sure where to find information on evaluating financial statement line items.

https://pcaobus.org/Standards/Auditing/Documents/PrintableReferenceTable.pdf

Member's Profile

When I mentioned evaluating financial statement line items, I am not referring specifically to the audit standards. For SOX, the auditing standard that is currently in effect is AS5. If you look up AS5, it provides information on the factors to use in performing a top down risk assessment (they should also be listed in a few of my SOX courses). Evaluating these factors when looking at your accounts will assist in determining which ones are the most significant.

I suggest you consider looking into taking the SOX certificate course that is on Illumeo. This will give you a comprehensive view of the SOX standard and how to evaluate the accounts.

Hope this helps

Course Syllabus
INTRODUCTION and OVERVIEW
  4:26Introduction to The Evolution of Sarbanes-Oxley (SOX) Auditing Standards
  9:24Background
  6:53Auditing Standard 2
Difficult Concepts
  9:45Management's Assessment Process
  9:28Definition of Terms
  6:56Entity Level Controls and Walkthroughs
Evolution
  12:20Evolution of Changes
  14:02Top Down Approach
  8:49The Bottom Line
CONCLUSION
  8:16The Next Phase
Continuous Play
  1:30:19The Evolution of Sarbanes-Oxley Auditing Standards
SUPPORTING MATERIALS
  PDFSlides: The Evolution of Sarbanes-Oxley (SOX) Auditing Standards
  PDFThe Evolution of Sarbanes-Oxley (SOX) Auditing Standards Glossary/Index
REVIEW and TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM