Document ID: chunk:federal_register_of_legislation:F2020L00252:body:0:p44
Version: federal_register_of_legislation:F2020L00252
Segment Type: other
Provision Reference: 
Character Range: 123014–126072

intentional management bias, and that is therefore misstated.  For continuing audits, indicators of possible management bias identified during the audit of preceding periods may influence the planning and risk assessment procedures in the current period.

174.           Existing section heading before paragraph A85 has been amended to read as When the Auditor Intends to Rely on the Operating Effectiveness of Relevant Controls (Ref: Para: 19)

175.           Existing paragraph A85 is amended to read as follows:

Testing the operating effectiveness of relevant controls may be appropriate when inherent risk is assessed as higher on the spectrum of inherent risk, including for significant risks.  This may be the case when the accounting estimate is subject to or affected by a high degree of complexity.  When the accounting estimate is affected by a high degree of subjectivity, and therefore requires significant judgement by management, inherent limitations in the effectiveness of the design of controls may lead the auditor to focus more on substantive procedures than on testing the operating effectiveness of controls.

176.           As a result of the footnote insertion above, subsequent footnotes of this Auditing Standard are re-numbered and references to these footnotes are updated accordingly.

177.           Existing footnote 49 in paragraph A104 is amended to read as follows:

See ASA 315, paragraph 816.

178.           Existing footnote 58 in paragraph A137 is amended to read as follows:

See also ASA 315, paragraph 3137.

179.           Existing footnote 65 in paragraph A149 is amended to read as follows:

See ASA 315, paragraphs 3238 and A152–A155A237–A241.

Amendments to ASA 550

180.           Existing footnote 7 in paragraph 11 is amended to read as follows:

See ASA 315, paragraph 513; and ASA 240, paragraph 1617.

181.           Existing footnote 8 in paragraph 12 is amended to read as follows:

See ASA 315, paragraph 1017; and ASA 240, paragraph 1516.

182.           Existing footnote 9 in paragraph 18 is amended to read as follows:

See ASA 315, paragraph 2528.

183.           Existing footnote 18 in paragraph A7 is amended to read as follows:

See ASA 315, paragraphs A26-A27A68-A70, which provide guidance regarding the nature of a special-purpose entity.

184.           Existing paragraph A9 is amended to read as follows:

Matters that may be addressed in the discussion among the engagement team include:

…

           * The importance that management and those charged with governance attach to the identification, appropriate accounting for, and disclosure of related party relationships and transactions (if the applicable financial reporting framework establishes related party requirements), and the related risk of management override of relevant controls.

185.           Existing paragraph A12 is amended to read as follows:

However, where the framework does not establish related party requirements, the entity may not have such information systems in place.  Under such circumstances, it is