Amendments to ASA 220Amendments to ASA 220

Amendments to ASA 220

1. The following paragraph A22 is inserted following existing paragraph Aus A21.1 of this Auditing Standard:

[Deleted by the AUASB].

1. Existing paragraph A24 is amended to read as follows:

In particular, the firm’s policies or procedures may require the firm or the engagement partner to take different actions from those applicable to personnel when obtaining an understanding of whether an individual from another firm:

 Has the appropriate competence and capabilities to perform the audit engagement. For example, the individual would not be subject to the firm’s recruitment and training processes and therefore the firm’s policies or procedures may state that this determination can be made through other actions such as obtaining information from the other firm or a licensing or registration body. Paragraphs 2619 and A59­–A64A38 of ASA 600 contain guidance on obtaining an understanding of the competence and capabilities of component auditors.

 …

1. Existing paragraph A25 is amended to read as follows:

When firm policies or procedures require specific activities to be undertaken in certain circumstances (e.g., consultation on a particular matter), it may be necessary for the firm’s related policies or procedures to be communicated to individuals who are not personnel. Such individuals are then able to alert the engagement partner if the circumstance arises, and this enables the engagement partner to comply with the firm’s policies or procedures. For example, in a group audit engagement, if a component auditor is performing audit procedures on the financial information of a component and identifies a difficult or contentious matter that is relevant to the group financial report and subject to consultation25 under the group auditor’s policies or procedures, the component auditor is able to alert the group auditorengagement team about the matter.

1. Existing paragraph A53 is amended to read as follows:

Information obtained during the acceptance and continuance process may assist the engagement partner in complying with the requirements of this ASA and making informed decisions about appropriate courses of action. Such information may include:

 …

 In relation to group audits, the nature of the control relationships between the parent and its entities and business unitscomponents; and

 …

1. Existing paragraph A54 is amended to read as follows:

Information obtained during acceptance and continuance may also be relevant in complying with the requirements of other ASAs, as well as this ASA, for example with respect to: