Banking depositors perceive failures at financial institutions as failures on the part of auditors, reducing their assessment of the credibility of an auditing firm, according to a new study. The study, which appears in the Accounting Review, a publication from the American Accounting Association, found negative perceptions of an audit firm that worked with a collapsed…

(Editors’ note: All quoted material in this article comes from SAS No. 145, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement, as codified in AU-C Section 315.) Revised risk assessment guidance will require auditors to apply new concepts for calendar year 2023 audits. The concept of inherent risk will remain a…