Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p27
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 75878–78853

possibility of the misstatement  being material, may assist in identifying the appropriate nature, timing and extent of the procedures to be performed.

101.           Existing paragraph A45 is amended to read as follows:

The nature assessment of the risk and or the nature of the assertion is relevant to the design of tests of details.  For example, tests of details related to the existence or occurrence assertion may involve selecting from items contained in a financial statement amount and obtaining the relevant audit evidence.  On the other hand, tests of details related to the completeness assertion may involve selecting from items that are expected to be included in the relevant financial statement amount and investigating whether they are included.

102.           Existing paragraph A46 is amended to read as follows:

Because the assessment of the risk of material misstatement takes account of internal controls that the auditor plans to test, the extent of substantive procedures may need to be increased when the results from tests of controls are unsatisfactory.  However, increasing the extent of an audit procedure is appropriate only if the audit procedure itself is relevant to the specific risk.

103.           Existing paragraph A56 is amended to read as follows:

Performing substantive procedures at an interim date without undertaking additional procedures at a later date increases the risk that the auditor will not detect misstatements that may exist at the period end.  This risk increases as the remaining period is lengthened.  Factors such as the following may influence whether to perform substantive procedures at an interim date:

           * The control environment and other relevant controls.

…

104.           Existing paragraph A57 is amended to read as follows:

Factors such as the following may influence whether to perform substantive analytical procedures with respect to the period between the interim date and the period end:

…

           * Whether the information system relevant to financial reporting will provide information concerning the balances at the period end and the transactions in the remaining period that is sufficient to permit investigation of:

…

105.           Existing paragraph A60 is amended to read as follows:

An audit of financial report is a cumulative and iterative process.  As the auditor performs planned audit procedures, the audit evidence obtained may cause the auditor to modify the nature, timing or extent of other planned audit procedures.  Information may come to the auditor's attention that differs significantly from the information on which the risk assessment was based.  For example:

…

In such circumstances, 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