Document ID: chunk:federal_register_of_legislation:F2025L00107:front:0:p167
Version: federal_register_of_legislation:F2025L00107
Segment Type: other
Provision Reference: 
Character Range: 520060–523452

including selecting and using appropriate methods, assumptions and data.

A455L. In some limited assurance engagements, it may be appropriate for the practitioner to undertake one or more of the procedures in paragraph 146R.

Evaluating Whether the Method Has Been Appropriately Selected and Applied (Ref: Para 146R(b)(i)a.)

A456R. In evaluating whether the method has been appropriately selected and applied, the practitioner's further procedures may address:

 1.                 Whether judgements made in selecting the method give rise to indicators of possible management bias;

 2.                 Whether the calculations are applied in accordance with the method and are mathematically accurate;

 3.                 When management's application of the method involves complex modelling, whether judgements have been applied consistently and whether, when applicable:

         1.                  The design of the model meets the measurement objective of the applicable criteria, is appropriate in the circumstances, and, if applicable, changes from the prior period's model are appropriate in the circumstances; and

         2.                Adjustments to the output of the model are consistent with the measurement objective of the applicable criteria and are appropriate in the circumstances; and

 4.                 Whether the integrity of the significant assumptions and the data have been maintained in applying the method. Assumptions used in determining an estimate or forward-looking information are referred to as significant assumptions when a reasonable variation in the assumption would materially affect the estimate or forward-looking information.

Evaluating Whether the Assumptions Are Appropriate (Ref: Para. 146R(b)(i)b.)

A457R. In evaluating whether the assumptions are appropriate, the practitioner's further procedures may address:

 1.                 Whether judgements made in selecting the significant assumptions give rise to indicators of possible management bias;

 2.                 Whether the significant assumptions are consistent with the purpose for preparing the estimates or forward-looking information, with each other and with those used in other disclosures, or with related assumptions used in other areas of the entity's business activities, based on the practitioner's knowledge obtained in the engagement;

 3.                 If applicable, whether management has the intent to carry out specific courses of action and has the ability to do so; and

 4.                 Whether the entity has considered alternative assumptions or outcomes, and why it has rejected them.

Evaluating Whether the Data Are Appropriate (Ref: Para. 146R(b)(i)c.)

A458R. In evaluating whether the data are appropriate, the practitioner's further procedures may address:

 1.                 Whether judgements made in selecting the data give rise to indicators of possible management bias;

 2.                 Whether the data are relevant and reliable in the circumstances; and

 1.                 Whether the data have been appropriately understood or interpreted by management, including with respect to contractual terms.

Changes from Prior Periods Not Based on New Circumstances or New Information (Ref: Para.  146L(a)(iii), 146R(b)(i))

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 5.       When a change from prior periods in a method, significant