Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p19
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 53713–56845

Para. A20–A24)

73.               Existing paragraph 10 is amended to read as follows:

In designing and performing tests of controls, the auditor shall:

(a)                Perform other audit procedures in combination with enquiry to obtain audit evidence about the operating effectiveness of the controls, including:

(i)                 How the controls were applied at relevant times during the period under audit;

(ii)               The consistency with which they were applied; and

(iii)             By whom or by what means they were applied.  (Ref: Para. A26–A30)

(b)                To the extent not already addressed, dDetermine whether the controls to be tested depend upon other controls (indirect controls), and, if so, whether it is necessary to obtain audit evidence supporting the effective operation of those indirect controls.  (Ref: Para. A32-A33)

74.               Existing paragraph 13 is amended to read as follows:

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 elements components of the entity's system of internal control, including the control environment, the entity's process to monitoring of the system of internal controls, and the entity's risk assessment process;

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75.               Existing paragraph 14 is amended to read as follows:

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:

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76.               Existing paragraph 15 is amended to read as follows:

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

77.               Existing paragraph 16 is amended to read as follows:

When evaluating the operating effectiveness of relevant controls upon which the auditor intends to rely, the auditor shall evaluate whether misstatements that have been detected by substantive procedures indicate that controls are not operating effectively.  The absence of misstatements detected by substantive procedures, however, does not provide audit evidence that controls related to the assertion being tested are effective.  (Ref: Para. A42)

78.               Existing paragraph 17 is amended to read as follows:

If deviations from controls upon which the auditor intends to rely are detected, the auditor shall make specific enquiries to understand these matters and their potential consequences, and shall determine whether: (Ref: Para. A41A43)

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