ASA 545 - Auditing Fair Value Measurements and Disclosures - April 2006
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Main Features
This Auditing Standard:
(a) establishes mandatory requirements and provides explanatory guidance on auditing fair value measurements and disclosures contained in a financial report, including addressing audit considerations relating to the fair value measurement, presentation and disclosure of material assets, liabilities and specific components of equity;
(b) requires the auditor to understand the entity’s process for determining fair value measurements and disclosures and relevant control activities to identify and assess risk of material misstatement (paragraph 15);
(c) requires the auditor to determine whether there is a need to use an expert (paragraph 35);
(d) requires the auditor to endeavour to perform further audit procedures in response to assessed risks of material misstatement (paragraph 40); and
(e) requires the auditor to obtain management representations about the reasonableness of significant assumptions (paragraph 72).