（2007）Descriptive Evidence from Audit Practice on SAS No.99 Brainstorming Activities.pdfVIP

Current Issues in Auditing American Accounting Association Volume One 2007 Pages A1–A11 Descriptive Evidence from Audit Practice on SAS No. 99 Brainstorming Activities Jodi L. Bellovary and Karla M. Johnstone SUMMARY: This paper describes how auditors conduct brainstorming sessions to comply with the requirements of SAS No. 99. We gather evidence by interviewing 22 auditors at all personnel levels across seven audit firms including all of the Big 4 firms and by observing actual brainstorming sessions. The results reveal how auditors prepare for brainstorming sessions and allow us to describe a typical four-step brainstorming session process. We describe brainstorming group interactions and provide evidence on brainstorming session outcomes in terms of fraud risk assessments, audit plan modifications, and budget modi- fications. Finally, we report how audit firms encourage professional skepticism during brainstorming. DOI: 10.2308/ciia.2007.1.1.A1 INTRODUCTION This paper provides descriptive evidence on auditor brainstorming activities associated with the requirements of SAS No. 99 AICPA 2002. A primary difference between SAS No. 99 and its predecessor, SAS No. 82 AICPA 1997, is that SAS No. 99 requires the audit team to “brain- storm” to consider the fraud triangle and to elicit areas of potential material misstatement due to fraud. However, SAS No. 99 is not explicit regarding how auditors should conduct brainstorming sessions or what brainstorming training and guidance should be available to auditors. SAS No. 99 para. 17 merely states that “the discussion should ordinarily involve key members of the audit team” and that “a number of factors will influence the extent of the discussion and how it sho