Document ID: chunk:federal_register_of_legislation:F2022C01152:reg:4:p37
Version: federal_register_of_legislation:F2022C01152
Segment Type: reg
Provision Reference: reg 4 (pt 37/63)
Character Range: 118342–121376

processing, or reporting of information obtained from outside of the general and subsidiary ledgers.

           * Information supporting one or more assertions is electronically initiated, recorded, processed, or reported. This is likely to be the case when there is a high volume of transactions or data, or a complex model is used, requiring the extensive use of information technology to ensure the accuracy and completeness of the information. A complex expected credit loss provision may be required for a financial institution or utility entity. For example, in the case of a utility entity, the data used in developing the expected credit loss provision may comprise many small balances resulting from a high volume of transactions. In these circumstances, the auditor may conclude that sufficient appropriate audit evidence cannot be obtained without testing controls around the model used to develop the expected credit loss provision.

In such cases, the sufficiency and appropriateness of the audit evidence may depend on the effectiveness of controls over the accuracy and completeness of the information.

A89.         As part of the audit of the financial report for certain entities (such as a bank or insurer), the auditor also may be required by law or regulation to undertake additional procedures in relation to, or to provide an assurance conclusion on, internal control. In these and other similar circumstances, the auditor may be able to use information obtained in performing such procedures as audit evidence, subject to determining whether subsequent changes have occurred that may affect its relevance to the audit.

Significant Risks (Ref: Para. 20)

A90.         When the auditor's further audit procedures in response to a significant risk consist only of substantive procedures, ASA 330[52] requires that those procedures include tests of details. Such tests of details may be designed and performed under each of the approaches described in paragraph 18 of this Auditing Standard based on the auditor's professional judgement in the circumstances. Examples of tests of details for significant risks related to accounting estimates include:

           * Examination, for example, examining contracts to corroborate terms or assumptions.

           * Recalculation, for example, verifying the mathematical accuracy of a model.

           * Agreeing assumptions used to supporting documentation, such as third‑party published information.

Obtaining Audit Evidence from Events Occurring up to the Date of the Auditor's Report (Ref: Para. 21)

A91.         In some circumstances, obtaining audit evidence from events occurring up to the date of the auditor's report may provide sufficient appropriate audit evidence to address the risks of material misstatement. For example, sale of the complete inventory of a discontinued product shortly after the period end may provide sufficient appropriate audit evidence relating to the estimate of its net realisable value at the period end. In other cases, it