Document ID: chunk:federal_register_of_legislation:F2017C00907:reg:15:p4
Version: federal_register_of_legislation:F2017C00907
Segment Type: reg
Provision Reference: reg 15 (pt 4/12)
Character Range: 17637–20972

periods on the relevant classes of transactions, account balances or disclosures, and the financial report as a whole.

Written Representation

14.               The auditor shall request a written representation from management and, where appropriate, those charged with governance whether they believe the effects of uncorrected misstatements are immaterial, individually and in aggregate, to the financial report as a whole.  A summary of such items shall be included in or attached to the written representation. (Ref: Para. A29)

Documentation

15.               The auditor shall include in the audit documentation:[5] (Ref: Para. A30)

(a)                The amount below which misstatements would be regarded as clearly trivial (see paragraph 5 of this Auditing Standard);

(b)                All misstatements accumulated during the audit and whether they have been corrected (see paragraphs 5, 8 and 12 of this Auditing Standard); and

(c)                The auditor's conclusion as to whether uncorrected misstatements are material, individually or in aggregate, and the basis for that conclusion (see paragraph 11 of this Auditing Standard).

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Application and Other Explanatory Material

Definition of Misstatement (Ref: Para. 4(a))

A1.             Misstatements may result from:

(a)                An inaccuracy in gathering or processing data from which the financial report is prepared;

(b)                An omission of an amount or disclosure, including inadequate or incomplete disclosures, and those disclosures required to meet disclosure objectives of certain financial reporting frameworks as applicable[6];

(c)                An incorrect accounting estimate arising from overlooking, or clear misinterpretation of, facts;

(d)                Judgements of management concerning accounting estimates that the auditor considers unreasonable or the selection and application of accounting policies that the auditor considers inappropriate.

(e)                An inappropriate classification, aggregation or disaggregation, of information; and

(f)                 For a financial report prepared in accordance with a fair presentation framework, the omission of a disclosure necessary for the financial report to achieve fair presentation beyond disclosures specifically required by the framework.[7]

    Examples of misstatements arising from fraud are provided in ASA 240.[8]

Accumulation of Identified Misstatements (Ref: Para. 5)

A2.             Paragraph 5 of this Auditing Standard requires the auditor to accumulate misstatements identified during the audit other than those that are clearly trivial.  "Clearly trivial" is not another expression for "not material."  Misstatements that are clearly trivial will be of a wholly different (smaller) order of magnitude, or of a wholly different nature than those that would be determined to be material, and will be matters that are clearly inconsequential, whether taken individually or in aggregate and whether judged by any criteria of size, nature or circumstances.  When there is any uncertainty about whether one or more items are clearly trivial, the misstatement is considered not to be clearly trivial.

Misstatements in Individual Statements

A3.             The auditor may designate an amount below which misstatements of amounts in