[The following paragraph was effective for audits of financial statements for fiscal years ending on or after June 30, 2001. It was amended, effective for audits of fiscal years beginning on or after December 15, 2010. See PCAOB Release No. 2010-004
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Section 312, Audit Risk and Materiality in Conducting an Audit, provides guidance on the auditor’s consideration of audit risk and materiality when planning and performing an audit of financial statements in accordance with generally accepted auditing standards. It requires the auditor to design procedures to obtain reasonable assurance of detecting misstatements of assertions about derivatives and securities that, when aggregated with misstatements of other assertions, could cause the financial statements taken as a whole to be materially misstated. When designing such procedures, the auditor should consider the inherent risk and control risk for these assertions. The auditor may also consider the work performed by the entity’s internal auditors in designing procedures. Guidance on considering the work performed by internal auditors is found in section 322, The Auditor’s Consideration of the Internal Audit Function in an Audit of Financial Statements.