Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p11
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 30689–33849

done so, the auditor shall obtain an understanding of the entity's related identify the entity's controls, including control activities, relevant to that address such risks, and evaluate their design and determine whether they have been implemented).[10] (Ref: Para. A32-A33)

41.               As a result of the footnote insertion above, subsequent footnotes of this Auditing Standard are re-numbered and references to these footnotes are updated accordingly.

42.               Existing paragraph 45 is amended to read as follows:

    The auditor shall include the following in the audit documentation12 of the auditor's understanding of the entity and its environment and of the identification and the assessment of the risks of material misstatement required by ASA 315:[13]

(a)                The significant decisions reached during the discussion among the engagement team regarding the susceptibility of the entity's financial report to material misstatement due to fraud; and

(b)                The identified and assessed risks of material misstatement due to fraud at the financial statement level and at the assertion level;. and

(c)                Identified controls in the control activities component that address assessed risks of material misstatement due to fraud.

43.               Existing paragraph A8 is amended to read as follows:

    Maintaining professional scepticism requires an ongoing questioning of whether the information and audit evidence obtained suggests that a material misstatement due to fraud may exist.  It includes considering the reliability of the information to be used as audit evidence and the identified controls in the control activities component, if any, over its preparation and maintenance.  where relevant.  Due to the characteristics of fraud, the auditor's professional scepticism is particularly important when considering the risks of material misstatement due to fraud.

44.               Existing footnote 17 of paragraph A19 is amended to read as follows:

See ASA 315, paragraphs 14(a) and 24(a)(ii)6 and 23, and ISA 610, Using the Work of Internal Auditors

45.               Existing paragraph A20 is amended to read as follows:

    Those charged with governance of an entity oversee the entity's systems for monitoring risk, financial control and compliance with the law.  In many countries, corporate governance practices are well developed and those charged with governance play an active role in oversight of the entity's assessment of the risks of fraud and of the relevant internal control the controls that address such risks.  Since the responsibilities of those charged with governance and management may vary by entity and by country, it is important that the auditor understands their respective responsibilities to enable the auditor to obtain an understanding of the oversight exercised by the appropriate individuals.[18]

46.               Existing paragraph A21 is amended to read as follows:

    An understanding of the oversight exercised by those charged with governance may provide insights regarding the susceptibility of the entity to management fraud, the adequacy