Document ID: chunk:federal_register_of_legislation:F2021C01250:reg:27:p22
Version: federal_register_of_legislation:F2021C01250
Segment Type: reg
Provision Reference: reg 27 (pt 22/23)
Character Range: 69309–72525

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:

           * The extent of misstatements that the auditor detects by performing substantive procedures may alter the auditor's judgement about the risk assessments and may indicate a significant deficiency in internal control.

           * The auditor may become aware of discrepancies in accounting records, or conflicting or missing evidence.

           * Analytical  procedures performed at the overall review stage of the audit may indicate a previously unrecognised risk of material misstatement.

    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 and the effect on the significant classes of transactions, account balances, or disclosures and their relevant assertions.  ASA 315 contains further guidance on revising the auditor's risk assessment.[10]

A63.         The auditor cannot assume that an instance of fraud or error is an isolated occurrence.  Therefore, the consideration of how the detection of a misstatement affects the assessed risks of material misstatement is important in determining whether the assessment remains appropriate.

A64.         The auditor's judgement as to what constitutes sufficient appropriate audit evidence is influenced by such factors as the following:

           * Significance of the potential misstatement in the assertion and the likelihood of its having a material effect, individually or aggregated with other potential misstatements, on the financial report.

           * Effectiveness of management's responses and controls to address the risks.

           * Experience gained during previous audits with respect to similar potential misstatements.

           * Results of audit procedures performed, including whether such audit procedures identified specific instances of fraud or error.

           * Source and reliability of the available information.

           * Persuasiveness of the audit evidence.

           * Understanding of the entity and its environment, the applicable financial reporting framework and entity's system of internal control.

Documentation (Ref: Para. 28)

A65.         The form and extent of audit documentation is a matter of professional judgement, and is influenced by the nature, size and complexity of the entity and its system of internal control, availability of information from the entity and the audit methodology and technology used in the audit.
[*]  Early adoption, in conjunction with ASA 315 Identifying and Assessing the Risks of Material Misstatement, permitted.
  [1]  See ASA 315 Identifying and Assessing the Risks of Material Misstatement.
  [2]  ASA 230 Audit Documentation, paragraphs 8-11 and paragraph A6.
   [3]  See ASA 315, paragraphs 31 and 34.
  [4]  See ASA 315, paragraph 33.
  [5]  See ASA 530 Audit Sampling.
   [6]  See ASA 315, paragraph 26(c)(i).
   [7]  See ASA 315, paragraph 36.
  [8]   See ASA 520 Analytical Procedures.
  [9]  See ASA 500 Audit Evidence,