Document ID: chunk:federal_register_of_legislation:F2019L00016:reg:21:p1
Version: federal_register_of_legislation:F2019L00016
Segment Type: reg
Provision Reference: reg 21 (pt 1/4)
Character Range: 39376–42390

21    See ASA 540, paragraph 30.

43.               The following paragraph A43 is inserted following the above insertions:

In some situations, there may be only one provider of certain information, for example, information from a central bank or government, such as an inflation rate, or a single recognised industry body. In such cases, the auditor's determination of the nature and extent of audit procedures that may be appropriate in the circumstances is influenced by the nature and credibility of the source of the information, the assessed risks of material misstatement to which that external information is relevant, and the degree to which the use of that information is relevant to the reasons for the assessed risk of material misstatement. For example, when the information is from a credible authoritative source, the extent of the auditor's further audit procedures may be less extensive, such as corroborating the information to the source's website or published information. In other cases, if a source is not assessed as credible, the auditor may determine that more extensive procedures are appropriate and, in the absence of any alternative independent information source against which to compare, may consider whether performing procedures to obtain information from the external information source, when practical, is appropriate in order to obtain sufficient appropriate audit evidence.

44.               The following paragraph A44 (including a footnote 22) is inserted following the above insertions:

When the auditor does not have a sufficient basis with which to consider the relevance and reliability of information from an external information source, the auditor may have a limitation on scope if sufficient appropriate audit evidence cannot be obtained through alternative procedures. Any imposed limitation on scope is evaluated in accordance with the requirements of ASA 705.22

         22    See ASA 705 Modifications to the Opinion in the Independent Auditor's Report, paragraph 13.

45.               As a result of the insertion of paragraphs A39 to A44, subsequent paragraphs of this Auditing Standard are re‑numbered and references to these paragraphs are updated accordingly.

46.               As a result of the insertion of footnotes 19 to 22, subsequent footnotes of this Auditing Standard are re‑numbered and references to these footnotes are updated accordingly.

47.               Existing paragraph A36 is amended to read as follows:

When information to be used as audit evidence has been prepared using the work of a management's expert, the requirement in paragraph 8 applies. For example, an individual or organisation may possess expertise in the application of models to estimate the fair value of securities for which there is no observable market. If the individual or organisation applies that expertise in making an estimate which the entity uses in preparing its financial report, the individual or organisation is a management's expert and paragraph