A previous article discussed several of the new terms that the new risk assessment standards have introduced to the audit process (Sept. 4-17, 2006, page 36). The following discussion expands on that by addressing in more detail some of the more significant differences between the requirements of the new risk assessment standards and past audit practice.* Audit plans and programs. The audit program is now called the audit plan, but it is still required. The auditor must develop an audit plan in which the auditor documents the audit procedures to be used. The audit plan is more detailed than the audit strategy, and includes the nature, timing and extent of audit procedures to be performed, including risk assessment procedures and planned further audit procedures.

As part of the recently signed pension bill, the Treasury Department and the Internal Revenue Service will have to better define what constitutes "good" condition for donations of clothing or household items.The IRS can deny deductions for donated items such as furniture, appliances, linens or electronics if the items aren't in appropriate condition.

The Financial Accounting Standards Board has issued a standard providing guidance for using fair value to measure assets and liabilities.

Billionaire tycoon Ricardo Salinas Pliego and the Securities and Exchange Commission reached a settlement last week, marking the end of the first lawsuit against a foreign company under the corporate governance rules of the Sarbanes-Oxley Act.

The newly released 2006-2007 Internal Revenue Service Priority Guidance Plan, designed as the agency's own blueprint for its guidance projects during the coming year, ranges in scope from consolidated returns to tax-exempt bonds.The Guidance Plan contains 10 more projects than last year's plan, and includes projected rulings on corporations and shareholders, employee benefits, executive compensation, excise taxes, exempt organizations, estate and gift taxes, partnerships, S corporations, and international issues.

A recently released exposure draft from the American Institute of CPAs contains two different interpretations under the institute's independence rules.

A new accounting bulletin from the Securities and Exchange Commission addresses how prior year misstatements should be considered when quantifying a current year's misstatement.