Document ID: chunk:federal_register_of_legislation:F2021L00403:body:0:p18
Version: federal_register_of_legislation:F2021L00403
Segment Type: other
Provision Reference: 
Character Range: 50070–53165

work to the team members, including the assignment of appropriately experienced team members to areas where there may be higher risks of material misstatement).

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Amendments to ASA 315 Identifying and Assessing the Risks of Material Misstatement

83.               Existing footnote 25 in paragraph A38 is amended to read as follows:

See ASA 220 Quality ControlManagement for an Audit of a Financial Report and Other Historical Financial Information, paragraphs 1222-24.

84.               Existing paragraph A69 is amended to read as follows:

The industry in which the entity operates may give rise to specific risks of material misstatement arising from the nature of the business or the degree of regulation.
Example:

In the construction industry, long-term contracts may involve significant estimates of revenues and expenses that give rise to risks of material misstatement. In such cases, it is important that the engagement team include members with sufficient relevant knowledge and experiencethe appropriate competence and capabilities.33

85.               Existing footnote 33 in paragraph A69 is amended to read as follows:

See ASA 220, paragraphs 1425-28.

86.               Existing footnote 56 in paragraph A218 is amended to read as follows:

See ASA 220, paragraphs 1732 and A19A87-A89.

Amendments to ASA 500 Audit Evidence

87.               Existing paragraph A5 is amended to read as follows:

Audit evidence is necessary to support the auditor's opinion and report. It is cumulative in nature and is primarily obtained from audit procedures performed during the course of the audit. It may, however, also include information obtained from other sources such as previous audits (provided the auditor has evaluated whether such information remains relevant and reliable as audit evidence for the current audit)9 or a firm's quality control procedures for client acceptance and continuancethrough the information obtained by the firm in the acceptance or continuance of the client relationship or engagement. In addition, the entity's accounting records and other sources internal to the entity are important sources of audit evidence. Information that may be used as audit evidence may have been prepared using the work of a management's expert or be obtained from an external information source. Audit evidence comprises both information that supports and corroborates management's assertions, and any information that contradicts such assertions. In addition, in some cases the absence of information (for example, management's refusal to provide a requested representation) is used by the auditor, and therefore, also constitutes audit evidence.

88.               Existing paragraph A30 is amended to read as follows:

As noted in paragraph A5, while audit evidence is primarily obtained from audit procedures performed during the course of the audit, it may also include information obtained from other sources such as, for example, previous audits, in certain circumstances, a firm's quality control procedures for client acceptance and continuance