Amendments to ASA 315Amendments to ASA 315

Amendments to ASA 315

1. Existing footnote 11 in paragraph 12(f) is amended to read as follows:

See ASA 240, paragraphs A24‒A27A24‒A26.

1. Existing footnote 12 in paragraph 12(l) is amended to read as follows:

See ASA 240, paragraph 2839(b) and ASA 550, Related Parties, paragraph 18.

1. Existing paragraph 35 is amended to read as follows:

The auditor shall evaluate whether the audit evidence obtained from the risk assessment procedures provides an appropriate basis for the identification and assessment of the risks of material misstatement, whether due to fraud or error. If not, the auditor shall perform additional risk assessment procedures until audit evidence has been obtained to provide such a basis. In identifying and assessing the risks of material misstatement, the auditor shall take into account all audit evidence obtained from the risk assessment procedures, whether corroborative or contradictory to assertions made by management. (Ref: Para. A230–A232)

1. Existing footnote 15 in paragraph A11 is amended to read as follows:

See ASA 240, paragraphs 17–2826–41.

1. Existing footnote 26 in paragraph A42 is amended to read as follows:

See ASA 240, paragraph 1629.

1. Existing paragraph A50 is amended to read as follows:

The auditor’s understanding of the entity and its environment, and the applicable financial reporting framework, assists the auditor in understanding the events and conditions that are relevant to the entity, and in identifying how inherent risk factors affect the susceptibility of assertions to misstatement in the preparation of the financial report, in accordance with the applicable financial reporting framework, and the degree to which they do so. Such information establishes a frame of reference within which the auditor identifies and assesses risks of material misstatement. This frame of reference also assists the auditor in planning the audit and exercising professional judgement and professional scepticism throughout the audit, for example, when:

• Identifying and assessing risks of material misstatement of the financial report in accordance with ASA 315 or other relevant standards (e.g., relating to risks of material misstatement due to fraud in accordance with ASA 240 or when identifying or assessing risks related to accounting estimates in accordance with ASA 540);
• …

1. Existing paragraph A74 is amended to read as follows:

An understanding of the entity’s measures assists the auditor in considering whether such measures, whether used externally or internally, create pressures on the entity to achieve performance targets. These pressures may motivate management to take actions that increase the susceptibility to misstatement due to management bias or fraud (e.g., to improve the business performance or to intentionally misstate the financial report) (see ASA 240 for requirements and guidance in relation to the risks of material misstatement due to fraud).