Document ID: chunk:federal_register_of_legislation:F2021C01250:reg:27:p4
Version: federal_register_of_legislation:F2021C01250
Segment Type: reg
Provision Reference: reg 27 (pt 4/23)
Character Range: 18402–21480

auditor's intended reliance.
(Ref: Para. A33)

Using audit evidence obtained during an interim period

12.               If the auditor obtains audit evidence about the operating effectiveness of controls during an interim period, the auditor shall:

(a)                Obtain audit evidence about significant changes to those controls subsequent to the interim period; and

(b)                Determine the additional audit evidence to be obtained for the remaining period.
(Ref: Para. A34-A35)

Using audit evidence obtained in previous audits

13.               In determining whether it is appropriate to use audit evidence about the operating effectiveness of controls obtained in previous audits, and, if so, the length of the time period that may elapse before retesting a control, the auditor shall consider the following:

(a)                The effectiveness of other components of the entity's system of internal control, including the control environment, the entity's process to monitor the system of internal control, and the entity's risk assessment process;

(b)                The risks arising from the characteristics of the control, including whether it is manual or automated;

(c)                The effectiveness of general IT-controls;

(d)                The effectiveness of the control and its application by the entity, including the nature and extent of deviations in the application of the control noted in previous audits, and whether there have been personnel changes that significantly affect the application of the control;

(e)                Whether the lack of a change in a particular control poses a risk due to changing circumstances; and

(f)                 The risks of material misstatement and the extent of reliance on the control.
(Ref: Para. A36)

14.               If the auditor plans to use audit evidence from a previous audit about the operating effectiveness of specific controls, the auditor shall establish the continuing relevance and reliability of that evidence by obtaining audit evidence about whether significant changes in those controls have occurred subsequent to the previous audit.  The auditor shall obtain this evidence by performing enquiry combined with observation or inspection, to confirm the understanding of those specific controls, and:

(a)                If there have been changes that affect the continuing relevance of the audit evidence from the previous audit, the auditor shall test the controls in the current audit.
(Ref: Para. A37)

(b)                If there have not been such changes, the auditor shall test the controls at least once in every third audit, and shall test some controls each audit to avoid the possibility of testing all the controls on which the auditor intends to rely in a single audit period with no testing of controls in the subsequent two audit periods. (Ref: Para. A38-A40)

Controls over significant risks

15.               If the auditor intends to rely on controls over a risk the auditor has determined to be a significant risk, the auditor shall test those