What issues were raised during public exposure of the proposed standard?
Letters received by the Task Force during the public exposure period were generally very supportive. However, several issues were raised that the Task Force considered important. One was that inclusion in the standard of specific risk factors might result in a checklist mentality, or imply that these risk factors are more than examples and must always be addressed on each audit. The Task Force debated on this issue at length, and decided that the need for explicit guidance outweighed this concern. While citing examples of specific factors that the auditor may look for, the standard emphasizes the importance of professional judgment in this area. Another issue was raised concerning the standards applicability in smaller, owner-managed environments. The Task Force incorporated a number of changes in the fraud standard to ensure that it could be meaningfully applied in those environments for example, recognizing the risk of income understatement because of income tax motivation in additio
