Document ID: chunk:federal_register_of_legislation:F2021C01244:reg:1:p7
Version: federal_register_of_legislation:F2021C01244
Segment Type: reg
Provision Reference: reg 1 (pt 7/7)
Character Range: 23257–25658

risk increases, the amount of difference considered acceptable without investigation decreases in order to achieve the desired level of persuasive evidence.[9]

Analytical Procedures that Assist When Forming an Overall Conclusion (Ref: Para. 6)

A17.         The conclusions drawn from the results of analytical procedures designed and performed in accordance with paragraph 6 are intended to corroborate conclusions formed during the audit of individual components or elements of the financial report.  This assists the auditor to draw reasonable conclusions on which to base the auditor's opinion.

A18.         The results of such analytical procedures may identify a previously unrecognised risk of material misstatement.  In such circumstances, ASA 315 requires the auditor to revise the auditor's assessment of the risks of material misstatement and modify the further planned audit procedures accordingly.[10]

A19.         The analytical procedures performed in accordance with paragraph 6 may be similar to those that would be used as risk assessment procedures.

Investigating Results of Analytical Procedures (Ref: Para. 7)

A20.         Audit evidence relevant to management's responses may be obtained by evaluating those responses taking into account the auditor's understanding of the entity and its environment, and with other audit evidence obtained during the course of the audit.

A21.         The need to perform other audit procedures may arise when, for example, management is unable to provide an explanation, or the explanation, together with the audit evidence obtained relevant to management's response, is not considered adequate.

[*]  Early adoption, in conjunction with ASA 540 Auditing Accounting Estimates and Related Disclosures, permitted.
[#]  Early adoption, in conjunction with ASA 315 Identifying and Assessing the Risks of Material Misstatement, permitted.
[1]  See ASA 315 Identifying and Assessing the Risks of Material Misstatement, paragraph 14(b).
[2]  See ASA 330 The Auditor's Responses to Assessed Risks, paragraphs 6 and 18.
[3]  See ASA 330, paragraph 18.
[4]  See ASA 500 Audit Evidence, paragraph A35.
[5]  See ASA 500, paragraph 10.
[6]  See ASA 330, paragraphs 22-23.
[7]  See ASA 320 Materiality in Planning and Performing an Audit, paragraph A13.
[8]  See ASA 330, paragraph 7(b).
[9] See ASA 330, paragraph A19.
[10]  See ASA 315, paragraph 37.