Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p28
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 78595–81633

the auditor may need to re-evaluate the planned audit procedures, based on the revised consideration of assessed risks of material misstatement for all or some of and the effect on the significant classes of transactions, account balances, or disclosures and related their relevant assertions.  ASA 315 contains further guidance on revising the auditor's risk assessment.[10]

106.           Existing paragraph A62 is amended to read as follows:

The auditor's judgement as to what constitutes sufficient appropriate audit evidence is influenced by such factors as the following:

…

           * Understanding of the entity and its environment, the applicable financial reporting framework and including the entity's system of internal control.

107.           Existing paragraph A63 is amended to read as follows:

The form and extent of audit documentation is a matter of professional judgement, and is influenced by the nature, size and complexity of the entity and its system of internal control, availability of information from the entity and the audit methodology and technology used in the audit.

108.           As a result of the footnotes insertion above, all footnotes of this Auditing Standard are re-numbered and references to these footnotes are updated accordingly.

Amendments to ASA 402

109.           Existing paragraph 1 is amended to read as follows:

    This Auditing Standard deals with the user auditor's responsibility to obtain sufficient appropriate audit evidence when a user entity uses the services of one or more service organisations.  Specifically, it expands on how the user auditor applies ASA 315[1] and ASA 3302 in obtaining an understanding of the user entity, including the entity's system of internal control relevant to the preparation of the financial report relevant to the audit, sufficient to identify and assess the risks of material misstatement and in designing and performing further audit procedures responsive to those risks.

110.           Existing paragraph 3 is amended to read as follows:

    Services provided by a service organisation are relevant to the audit of a user entity's financial report when those services, and the controls over them, are part of the user entity's information system , including related business processes, relevant to financial reporting the preparation of the financial report.  Although m Most controls at the service organisation are likely to relate to financial reporting be part of the user entity's information system relevant to the preparation of the financial report, there may be other or related controls that may also be relevant to the audit, such as controls over the safeguarding of assets.  A service organisation's services are part of a user entity's information system, including related business processes, relevant to financial reporting if these services affect any of the following:

(a)                How information relating to significant classes of transactions, account balances and disclosures flows through the user