Last week the Public Company Accounting Oversight Board (PCAOB) published Staff Audit Practice Alert No. 9: Assessing and Responding to Risk in the Current Economic Environment (Dec. 6, 2011).

"This practice alert discusses issues posed by the current economic situation and highlights certain requirements in the new risk assessment standards,” says Martin Baumann, PCAOB chief auditor and director of professional standards. “Auditors should be alert to the new requirements . . . and how those requirements relate to audits performed in the current economic climate."

"Today's volatile economic environment may affect companies' operations and financial reporting, which has implications for audits," adds PCAOB chairman James R. Doty. "The alert reminds auditors of their responsibilities under these conditions." The alert also analyzes the auditor’s risk assessment by reference to four categories: 1) the impact of economic conditions; 2) fair value measurements and estimates; 3) a company's ability to continue as a going concern; and 4) financial statement disclosures.