Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p30
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 84297–87244

and assess the risks of material misstatement; and

(b)                To design and perform audit procedures responsive to those risks.

…

112.           Footnote 3 in paragraph 9 is amended to read as follows:

See ASA 315, paragraph 1119.

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

When obtaining an understanding of the entity's system of internal control relevant to the audit in accordance with ASA 315,4 the user auditor shall identify controls in the control activities component[4] evaluate the design and implementation of relevant controls at the user entity, from those that relate to the services provided by the service organisation, including those that are applied to the transactions processed by the service organisation, and evaluate their design and determine whether they have been implemented.[5] (Ref: Para. A12–A14)

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

115.           Existing paragraph 11 is amended to read as follows:

The user auditor shall determine whether a sufficient understanding of the nature and significance of the services provided by the service organisation and their effect on the user entity's system of internal control relevant to the audit has been obtained to provide an appropriate basis for the identification and assessment of the risks of material misstatement.

116.           Existing paragraph 12 is amended to read as follows:

If the user auditor is unable to obtain a sufficient understanding from the user entity, the user auditor shall obtain that understanding from one or more of the following procedures:

…

(d) Using another auditor to perform procedures that will provide the necessary information about the relevant controls at the service organisation. (Ref: Para. A15–A20)

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

If the user auditor plans to use a type 1 or type 2 report as audit evidence to support the user auditor's understanding about the design and implementation of controls at the service organisation, the user auditor shall:

…

(b) Evaluate the sufficiency and appropriateness of the evidence provided by the report for the understanding of the user entity's internal controls at the service organisation relevant to the audit; and

118.           Existing footnote 7 in paragraph A14 is amended to read as follows:

See ASA 315, paragraph 3026(a)(iii).

119.           Existing paragraph A19 is amended to read as follows:

Another auditor may be used to perform procedures that will provide the necessary information about the relevant controls at the service organisation related to services provided to the user entity.  If a type 1 or type 2 report has been issued, the user auditor may use the service auditor to perform these procedures as the