Document ID: chunk:federal_register_of_legislation:F2022L01638:body:0:p5
Version: federal_register_of_legislation:F2022L01638
Segment Type: other
Provision Reference: 
Character Range: 12019–15122

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 read as follows:

The auditor needs to use the understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of including its internal control, to determine the enquiries to be made and the analytical and other review procedures to be applied, and to identify the particular events, transactions or assertions to which enquiries may be directed or analytical or other review procedures applied.

17.               Existing paragraph A11 is amended to read as follows:

The procedures performed by the auditor to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of including its internal control, ordinarily include the following:

…

       (j)  enquiring of management and of other appropriate individuals within the entity about the effect of changes in the entity's business activities;

…

18.               Existing paragraph A19 is amended to read as follows:

A review ordinarily does not require tests of the accounting records through inspection, observation or confirmation. Procedures for performing a review of a financial report ordinarily are limited to making enquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures, rather than corroborating information obtained concerning matters relating to the financial report. The auditor's understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of including its internal control, the results of the risk assessments relating to the preceding audit and the auditor's consideration of materiality as it relates to the financial report, affects the nature and extent of the enquiries made, and analytical and other review procedures applied.

19.               Existing paragraph A21 is amended to read as follows:

The auditor may perform many of the review procedures before or simultaneously with the entity's preparation of the financial report. For example, it may be practicable to update the understanding of the entity and its environment, the applicable financial reporting framework, and the entity's system of including its internal control, and begin reading applicable minutes before the end of the period. Performing some of the review procedures earlier in the period also permits early identification and consideration of significant accounting matters affecting the financial report.

Amendments to ASRE 2415

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

The auditor shall implement the firm's policies or quality control procedures that are applicable to the individual engagement.5

21.               Existing footnote 5 in paragraph 12 is amended to read as follows:

See