Document ID: chunk:federal_register_of_legislation:F2022L01638:body:0:p4
Version: federal_register_of_legislation:F2022L01638
Segment Type: other
Provision Reference: 
Character Range: 9287–12271

as it relates to the preparation of both the annual and interim or other financial reports.

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

Through performing the audit of the annual financial report, the auditor obtains an understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of including its internal control. When the auditor is engaged to review the financial report, under paragraph 13, the auditor needs to update this understanding through enquiries made in the course of the review, to assist the auditor in focusing the enquiries to be made and the analytical and other review procedures to be applied. A practitioner who is engaged to perform a review of a financial report, and who is not the auditor of the entity, does not perform the review in accordance with ASRE 2410* , as the practitioner ordinarily does not have the same understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of including its internal control, as the auditor of the entity.

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13.               Existing paragraph A6 is amended to read as follows:

The elements of quality controlmanagement that are relevant to an individual engagement include leadership responsibilities for managing and achieving quality on the engagement, relevant ethical requirements, acceptance and continuance of client relationships and specific engagements, assignment of engagement teamsengagement resources, engagement performance, and monitoring and remediation. ASQCM 1 and ASA 2206 include guidance that may be helpful.

14.               Existing footnote 6 in paragraph A6 is amended to read as follows:

See ASQCM 1 Quality ControlManagement for Firms that Perform Audits andor Reviews of Financial Reports and Other Financial Information, andor Other Assurance or Related Services Engagements and ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information.

15.               Existing paragraph A9 is amended to read as follows:

Under ASA 315 Identifying and Assessing the Risks of Material Misstatement, the auditor who has audited the entity's financial report for one or more annual periods has obtained an understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of including its internal control, as it relates to the preparation of the annual financial report, that was sufficient to conduct the audit. In planning a review of a financial report, the auditor needs to update this understanding. The auditor also needs to obtain a sufficient understanding of the entity's system of internal control as it relates to the preparation of the financial report subject to review, as it may differ from internal control as it relates to the preparation of the annual financial report.

16.               Existing paragraph A10 is amended to