Document ID: chunk:federal_register_of_legislation:F2017C00509:body:0:p12
Version: federal_register_of_legislation:F2017C00509
Segment Type: other
Provision Reference: 
Character Range: 28881–31649

done while performing assurance engagement
 (1) In carrying out an assurance engagement, the audit team leader must perform a risk assessment to determine the timing and extent of evidence gathering necessary to carry out the assurance engagement and the amount of time necessary to carry out the engagement (see section 3.10).
 (2) The audit team leader must do either or both of the following if the risk assessment indicates that it is necessary or appropriate to do so:
 (a) test the operating effectiveness of the systems and processes used to prevent, detect or correct misstatements in the matter being audited (see section 3.11);
 (b) design and undertake procedures to detect misstatements in the matter being audited.
Note: For paragraph (2)(b), usually, the greater the risk of a misstatement in the matter being audited, the greater the timing and extent of these procedures. Because the risk of a misstatement takes account of the systems and processes that the audited body has to ensure the reliability and accuracy of the matter being audited, if the systems and processes are assessed by the audit team leader as being unsatisfactory, the more these procedures to detect misstatements in the matter being audited are required to be performed by the audit team leader.
 (3) In doing the things mentioned in subsections (1) and (2) (the assurance engagement procedures), the audit team leader must also do the following:
 (a) gather evidence relating to the matter being audited (see sections 3.13 to 3.15);
 (b) consider whether a misstatement in the matter being audited is material (see section 3.16).
 (4) The process of carrying out an assurance engagement is a cumulative and iterative one. The audit team leader must continue to perform the assurance engagement procedures until the audit team leader is able to determine if he or she is able to give a conclusion in relation to the matter being audited.
Note: For conclusions that may be given in an assurance engagement, see sections 3.17 to 3.19.

3.10  Risk assessment
 (1) In performing a risk assessment, the audit team leader must:
 (a) analyse the matter being audited; and
 (b) consult the persons who are responsible for the audited body's management and governance about the matter being audited; and
 (c) observe the audited body's systems and processes that may impact on the risk of there being a misstatement in the matter being audited; and
 (d) inspect documents of the audited body relevant to the matter being audited; and
 (e) perform such other activities relating to the determination of the risk of misstatements in the matter being audited that the audit team leader thinks appropriate.
 (2) In carrying out an assurance engagement, the audit team leader must consider the