Document ID: chunk:federal_register_of_legislation:F2022C01152:reg:4:p9
Version: federal_register_of_legislation:F2022C01152
Segment Type: reg
Provision Reference: reg 4 (pt 9/63)
Character Range: 37040–40427

prior periods are appropriate; (Ref: Para. A95, A102–A103)

(b)                Whether judgements made in selecting the significant assumptions give rise to indicators of possible management bias; (Ref: Para. A96)

(c)                Whether the significant assumptions are consistent with each other and with those used in other accounting estimates, or with related assumptions used in other areas of the entity's business activities, based on the auditor's knowledge obtained in the audit; and (Ref: Para. A104)

(d)                When applicable, whether management has the intent to carry out specific courses of action and has the ability to do so. (Ref: Para. A105)

Data

25.               In applying the requirements of paragraph 22, with respect to data, the auditor's further audit procedures shall address:

(a)                Whether the data is appropriate in the context of the applicable financial reporting framework, and, if applicable, changes from prior periods are appropriate; (Ref: Para. A95, A106)

(b)                Whether judgements made in selecting the data give rise to indicators of possible management bias; (Ref: Para. A96)

(c)                Whether the data is relevant and reliable in the circumstances; and (Ref: Para. A107)

(d)                Whether the data has been appropriately understood or interpreted by management, including with respect to contractual terms. (Ref: Para. A108)

Management's Selection of a Point Estimate and Related Disclosures about Estimation Uncertainty

26.               In applying the requirements of paragraph 22, the auditor's further audit procedures shall address whether, in the context of the applicable financial reporting framework, management has taken appropriate steps to:

(a)                Understand estimation uncertainty; and (Ref: Para. A109)

(b)                Address estimation uncertainty by selecting an appropriate point estimate and by developing related disclosures about estimation uncertainty. (Ref: Para. A110–A114)

27.               When, in the auditor's judgement based on the audit evidence obtained, management has not taken appropriate steps to understand or address estimation uncertainty, the auditor shall: (Ref: Para. A115–A117)

(a)                Request management to perform additional procedures to understand estimation uncertainty or to address it by reconsidering the selection of management's point estimate or considering providing additional disclosures relating to the estimation uncertainty, and evaluate management's response(s) in accordance with paragraph 26;

(b)                If the auditor determines that management's response to the auditor's request does not sufficiently address estimation uncertainty, to the extent practicable, develop an auditor's point estimate or range in accordance with paragraphs 28–29; and

(c)                Evaluate whether a deficiency in internal control exists and, if so, communicate in accordance with ASA 265.[20]

Developing an Auditor's Point Estimate or Range

28.               When the auditor develops a point estimate or range to evaluate management's point estimate and related disclosures about estimation uncertainty, including when required by paragraph 27(b), the auditor's further audit procedures shall include procedures to evaluate whether the methods, assumptions or data used are appropriate