Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p18
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 50833–54007

footnote 3 in paragraph 6 is amended to read as follows:

See ASA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and its Environment, paragraphs A129-A130A191-A192.

68.               Existing footnote 13 in paragraph A2 is amended to read as follows:

See ASA 315, paragraph 2528, requires the auditor to identify and assess the risk of material misstatement at the financial statement and assertion level.

Amendments to ASA 330

69.               Existing footnote 1 of paragraph 1 is amended to read as follows:

See ASA 315, Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment

70.               Existing paragraph 6 is amended to read as follows:

The auditor shall design and perform further audit procedures whose nature, timing and extent are based on and are responsive to the assessed risks of material misstatement at the assertion level.  (Ref: Para. A4–A8; A44-A55)

71.               Existing paragraph 7 is amended to read as follows:

In designing the further audit procedures to be performed, the auditor shall:

(a)                Consider the reasons for the assessment given to the risk of material misstatement at the assertion level for each significant class of transactions, account balance, and disclosure, including:

(i)                 The likelihood and magnitude of material misstatement due to the particular characteristics of the relevant significant class of transactions, account balance, or disclosure (that is, the inherent risk); and

(ii)               Whether the risk assessment takes account of relevant controls that address the risk of material misstatement (that is, the control risk), thereby requiring the auditor to obtain audit evidence to determine whether the controls are operating effectively (that is, the auditor intends to rely onplans to test the operating effectiveness of controls in determining the nature, timing and extent of substantive procedures); and (Ref: Para. A9–A18)

(b)                Obtain more persuasive audit evidence the higher the auditor's assessment of risk.  (Ref: Para. A19)

72.               Existing paragraph 8 is amended to read as follows:

The auditor shall design and perform tests of controls to obtain sufficient appropriate audit evidence as to the operating effectiveness of relevant controls if:

(a)                The auditor's assessment of risks of material misstatement at the assertion level includes an expectation that the controls are operating effectively (that is, the auditor intends plans to test to rely on the operating effectiveness of controls in determining the nature, timing and extent of substantive procedures); or

(b)                Substantive procedures alone cannot provide sufficient appropriate audit evidence at the assertion level.  (Ref: 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