Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p33
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 92303–95304

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.

127.           Existing footnote 9 in paragraph A5 is amended to read as follows:

See ASA 315, paragraph 916.

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

Observation consists of looking at a process or procedure being performed by others, for example, the auditor's observation of inventory counting by the entity's personnel, or of the performance of controls activities.  Observation provides audit evidence about the performance of a process or procedure, but is limited to the point in time at which the observation takes place, and by the fact that the act of being observed may affect how the process or procedure is performed.  See ASA 501 for further guidance on observation of the counting of inventory.

Amendments to ASA 501

129.           Existing paragraph A4 is amended to read as follows:

Matters relevant in evaluating management's instructions and procedures for recording and controlling the physical inventory counting include whether they address, for example:

           * The application of appropriate controls activities, for example, collection of used physical inventory count records, accounting for unused physical inventory count records, and count and re-count procedures.

Amendments to ASA 505

130.           Existing footnote 14 in paragraph A9 is amended to read as follows:

See ASA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment, paragraph 3137.

131.           Existing footnote 18 in paragraph A17 is amended to read as follows:

See ASA 315, paragraph 3137.

132.           Existing footnote 20 in paragraph A19 is amended to read as follows:

See ASA 315, paragraph 3137.

Amendments to ASA 520

133.           Existing footnote 1 in paragraph 1 is amended to read as follows:

See ASA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment, paragraph 614(b).

134.           Existing footnote 10 in paragraph A18 is amended to read as follows:

See ASA 315, paragraph 3137.

Amendments to ASA 530

135.           Existing paragraph A7 is amended to read as follows:

In considering the characteristics of a population, for tests of controls, the auditor makes an assessment of the expected rate of deviation based on the auditor's understanding of the relevant controls or on the examination of a small number of items from the population. This assessment is made in order to design an audit sample and to determine sample size. For example, if the expected rate of deviation is unacceptably high, the auditor will ordinarily decide not to perform tests of controls. Similarly, for tests