Document ID: chunk:federal_register_of_legislation:F2022L00712:body:0:p10
Version: federal_register_of_legislation:F2022L00712
Segment Type: other
Provision Reference: 
Character Range: 27240–30330

reached in the discussion.  The engagement partner may discuss matters with key members of the engagement team including, if considered appropriate, those with specific skills or knowledge, and those responsible for the work to be performed ataudits of components, while delegating discussion with others, taking into account the extent of communication considered necessary throughout the engagement team.  A communications plan, agreed by the engagement partner, may be useful.

29.               Existing paragraph A218 is amended to read as follows:

The determination of significant risks allows for the auditor to focus more attention on those risks that are on the upper end of the spectrum of inherent risk, through the performance of certain required responses, including:

           * …

           * ASA 600 requires the group auditor to evaluate the appropriateness of the design and performance of further audit procedures for areas of higher assessed risks of material misstatement of the group financial report, or significant risks, on which a component auditor is determining the further audit procedures to be performedmore involvement by the group engagement partner if the significant risk relates to a component in a group audit and for the group engagement team to direct the work required at the component by the component auditor.[57]

Amendments to ASA 320

30.               Existing paragraph 9 is amended to read as follows:

For the purposes of this Auditing Standard, the following terms have has the meanings attributed below:

         (a)                • Performance materiality means the amount or amounts set by the auditor at less than materiality for the financial report as a whole to reduce aggregation risk to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial report as a whole. If applicable, performance materiality also refers to the amount or amounts set by the auditor at less than the materiality level or levels for particular classes of transactions, account balances or disclosures.

         (b)                Aggregation risk means the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the financial report as a whole.

31.               Existing paragraph A13 is amended to read as follows:

Planning the audit solely to detect individually material misstatements overlooks the fact that the aggregate of individually immaterial misstatements may cause the financial report to be materially misstated, and leaves no margin for possible undetected misstatements. Performance materiality (which, as defined, is one or more amounts) is set at less than materiality for the financial report as a whole to reduce aggregation risk to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements in the financial report exceeds materiality for the financial report as a whole. Similarly, performance materiality relating to a materiality level determined