Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p20
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 56580–59728

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)

…

(c) The potential risks of material misstatement need to be addressed using substantive procedures.

79.               Existing paragraph 27 is amended to read as follows:

If the auditor has not obtained sufficient appropriate audit evidence as to related to a an material financial statement relevant assertion about a class of transactions, account balance or disclosure, the auditor shall attempt to obtain further audit evidence.  If the auditor is unable to obtain sufficient appropriate audit evidence, the auditor shall express a qualified opinion or disclaim an opinion on the financial report.

80.               Existing paragraph A1 is amended to read as follows:

Overall responses to address the assessed risks of material misstatement at the financial statement level may include:

           * Emphasising to the engagement team the need to maintain professional scepticism.

           * Assigning more experienced staff or those with special skills or using experts.

           * Providing more supervision Changes to the nature, timing and extent of direction and supervision of members of the engagement team and the review of the work performed.

           * Incorporating additional elements of unpredictability in the selection of further audit procedures to be performed.

           * Changes to the overall audit strategy as required by ASA 300, or planned audit procedures, and may include changes to:

                   + The auditor's determination of performance materiality in accordance with ASA 320.

                   + The auditor's plans to tests the operating effectiveness of controls, and the persuasiveness of audit evidence needed to support the planned reliance on the operating effectiveness of the controls, particularly when deficiencies in the control environment or the entity's monitoring activities are identified.

                   + The nature, timing and extent of substantive procedures. For example, it may be appropriate to perform substantive procedures at or near the date of the financial report when the risk of material misstatement is assessed as higher.

           * Making general changes to the nature, timing or extent of audit procedures, for example: performing substantive procedures at the period end instead of at an interim date; or modifying the nature of audit procedures to obtain more persuasive audit evidence.

81.               Existing paragraph A4 is amended to read as follows:

The auditor's assessment of the identified risks of material misstatement at the assertion level provides a basis for considering the appropriate audit approach for designing and performing further audit procedures.  For example, the auditor may determine that:

(a)                Only by performing tests of controls may the auditor achieve an effective response to the assessed risk of material misstatement for