Document ID: chunk:federal_register_of_legislation:F2023C01130:body:0:p70
Version: federal_register_of_legislation:F2023C01130
Segment Type: other
Provision Reference: 
Character Range: 203409–206549

a whole.

A234.      There may be classes of transactions, account balances or disclosures that are material but have not been determined to be significant classes of transactions, account balances or disclosures (i.e., there are no relevant assertions identified).
Example:

The entity may have a disclosure about executive compensation for which the auditor has not identified a risk of material misstatement.  However, the auditor may determine that this disclosure is material based on the considerations in paragraph A233.

A235.      Audit procedures to address classes of transactions, account balances or disclosures that are material but are not determined to be significant are addressed in ASA 330.[65] When a class of transactions, account balance or disclosure is determined to be significant as required by paragraph 29, the class of transactions, account balance or disclosure is also a material class of transactions, account balance or disclosure for the purposes of paragraph 18 of ASA 330.

Revision of Risk Assessment (Ref: Para. 37)

A236.      During the audit, new or other information may come to the auditor's attention that differs significantly from the information on which the risk assessment was based.
Example:

The entity's risk assessment may be based on an expectation that certain controls are operating effectively.  In performing tests of those controls, the auditor may obtain audit evidence that they were not operating effectively at relevant times during the audit.  Similarly, in performing substantive procedures the auditor may detect misstatements in amounts or frequency greater than is consistent with the auditor's risk assessments.  In such circumstances, the risk assessment may not appropriately reflect the true circumstances of the entity and the further planned audit procedures may not be effective in detecting material misstatements.  Paragraphs 16 and 17 of ASA 330 provide further guidance about evaluating the operating effectiveness of controls.

Documentation (Ref: Para. 38)

A237.      For recurring audits, certain documentation may be carried forward, updated as necessary to reflect changes in the entity's business or processes.

A238.      ASA 230 notes that, among other considerations, although there may be no single way in which the auditor's exercise of professional scepticism is documented, the audit documentation may nevertheless provide evidence of the auditor's exercise of professional scepticism.[66] For example, when the audit evidence obtained from risk assessment procedures includes evidence that both corroborates and contradicts management's assertions, the documentation may include how the auditor evaluated that evidence, including the professional judgements made in evaluating whether the audit evidence provides an appropriate basis for the auditor's identification and assessment of the risks of material misstatement.  Examples of other requirements in this ASA for which documentation may provide evidence of the exercise of professional scepticism by the auditor include:

           * Paragraph 13, which requires the auditor to design