How Audits Changed This Year     Today's businesses are coping with constant changes. Under new standards imposed by the AICPA Auditing Standards Board, audits are now undergoing significant changes as well.     That's because eight new interrelated standards (SAS 104-SAS 111) make significant changes to the auditor's assessment of the risks of material misstatement, whether caused by fraud or error. They became effective for audits of financial statements for periods beginning on December 15, 2006, although earlier adoption was permitted.     Specifically, the risk assessment standards require: A more in-depth understanding of an entity and its environment, including its internal control. That way, the auditor can identify the risks of material misstatement in the financial statements and what the entity is doing to mitigate them. A more rigorous assessment of the risks of where and how the financial statements could be materially misstated. Improved linkage between the auditor's assessed risks and the nature, timing and extent of audit procedures performed in response to those risks.     The standards "get to the very heart of the audit process," according to the AICPA and may significantly alter the engagement. The benefit: More comprehensive audits can be more effective for the outside users, add value to an organization and improve operations.

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