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Vadnais Lake Area Water <br />Management Organization <br />Management Information <br />SAS 99 is a comprehensive, far-reaching audit standard which is expected to significantly <br />change the way auditor's approach and perform audits. The bottom line is that SAS 99 expects <br />auditors to perform more work in every audit in both identifying and responding to the risk of <br />material misstatement due to fraud. Implementation of SAS 99 will require additional time to <br />complete an audit. <br />For the Organization, SAS 99 will be required for the audit of the year ending December <br />31, 2003. An overview of SAS 99 is as follows: <br />Information Gathering Phase: <br />• A required brainstorming session among the audit team members to discuss the potential <br />for material misstatement due to fraud. <br />• An increased emphasis on inquiry as an audit procedure that increases the likelihood of <br />fraud detection. <br />o Required management inquiries, many of which are new. <br />o Required inquiries of "others" within the entity (i.e., non -accounting personnel). <br />• Expanded use of analytical procedures to gather information used to identify risks of the <br />material misstatement due to fraud. <br />• The consideration of other information, such as client acceptance and continuance <br />procedures, during the information -gathering phase. <br />2 <br />