Amendments to ASA 701

Amendments to ASA 701

1. Existing paragraph A20 is amended to read as follows:

ASA 315 defines a significant risk as an identified and assessed risk of material misstatement for which the assessment of inherent risk is close to the upper end of the spectrum of inherent risk due to the degree to which the inherent risk factors affect the combination of the likelihood of a misstatement occurring and the magnitude of the potential misstatement should that misstatement occur that, in the auditor’s judgement, requires special audit consideration.[24] Areas of significant management judgement and significant unusual transactions may often be identified as significant risks. Significant risks are therefore often areas that require significant auditor attention.

1. 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.
2. Existing footnote 26 in paragraph A22 is amended to read as follows:

See ASA 315, paragraph 3137.