Document ID: chunk:federal_register_of_legislation:F2023C01130:body:0:p8
Version: federal_register_of_legislation:F2023C01130
Segment Type: other
Provision Reference: 
Character Range: 21252–24643

of material misstatement, whether due to fraud or error, at the financial report and assertion levels; and

(b)                The design of further audit procedures in accordance with ASA 330.

The auditor shall design and perform risk assessment procedures in a manner that is not biased towards obtaining audit evidence that may be corroborative or towards excluding audit evidence that may be contradictory.  (Ref: Para. A14)

14.               The risk assessment procedures shall include the following: (Ref: Para. A19–A21)

(a)                Enquiries of management and of other appropriate individuals within the entity, including individuals within the internal audit function (if the function exists).  (Ref: Para. A22–A26)

(b)                Analytical procedures.  (Ref: Para. A27–A31)

(c)                Observation and inspection.  (Ref: Para. A32–A36)

Information from Other Sources

15.               In obtaining audit evidence in accordance with paragraph 13, the auditor shall consider information from: (Ref: Para. A37‒A38)

(a)                The auditor's procedures regarding acceptance or continuance of the client relationship or the audit engagement; and

(b)                When applicable, other engagements performed by the engagement partner for the entity.

16.               When the auditor intends to use information obtained from the auditor's previous experience with the entity and from audit procedures performed in previous audits, the auditor shall evaluate whether such information remains relevant and reliable as audit evidence for the current audit.  (Ref: Para. A39‒A41)

Engagement Team Discussion

17.               The engagement partner and other key engagement team members shall discuss the application of the applicable financial reporting framework and the susceptibility of the entity's financial report to material misstatement.  (Ref: Para. A42–A47)

18.               When there are engagement team members not involved in the engagement team discussion, the engagement partner shall determine which matters are to be communicated to those members.

Obtaining an Understanding of the Entity and Its Environment, the Applicable Financial Reporting Framework and the Entity's System of Internal Control (Ref: Para. A48‒A49)

Understanding the Entity and Its Environment, and the Applicable Financial Reporting Framework (Ref: Para. A50‒A55)

19.               The auditor shall perform risk assessment procedures to obtain an understanding of:

(a)                The following aspects of the entity and its environment:

(i)                 The entity's organisational structure, ownership and governance, and its business model, including the extent to which the business model integrates the use of IT; (Ref: Para. A56‒A67)

(ii)               Industry, regulatory and other external factors; (Ref: Para. A68‒A73) and

(iii)             The measures used, internally and externally, to assess the entity's financial performance; (Ref: Para. A74‒A81)

(b)                The applicable financial reporting framework, and the entity's accounting policies and the reasons for any changes thereto; (Ref: Para. A82‒A84) and

(c)                How inherent risk factors affect susceptibility of assertions to misstatement and the degree to which they do so, in the preparation of the financial report in accordance with the applicable