Accumulation and Consideration of IdentiAccumulation and Consideration of Identified Misstatements

Accumulation and Consideration of Identified Misstatements

Accumulation of Identified Misstatements

1. The practitioner shall accumulate misstatements identified during the engagement, other than those that are clearly trivial. (Ref: Para. A470–A476)
2. The practitioner shall: (Ref: Para. A477–A480)
   1. Consider whether identified misstatements, either individually or in aggregate, may be due to fraud; and
   2. Respond appropriately if there are indicators that there may be material misstatements due to fraud.

Consideration of Identified Misstatements as the Engagement Progresses

1. The practitioner shall determine whether the approach to the engagement needs to be revised if: (Ref: Para. A481)
   1. The nature of identified misstatements and the circumstances of their occurrence indicate that other misstatements may exist that, when aggregated with misstatements accumulated during the engagement, could be material; or
   2. The misstatements accumulated during the engagement may, in the aggregate, result in the sustainability information being materially misstated.

Communicating and Correcting Misstatements

1. The practitioner shall communicate to management, on a timely basis, all misstatements accumulated during the assurance engagement, and shall request management to correct those misstatements. (Ref: Para. A482)
2. If, at the practitioner’s request, management has examined the sustainability information and corrected misstatements that were detected, the practitioner shall perform additional procedures with respect to the work performed by management to determine whether material misstatements remain.
3. If management refuses to correct some or all of the misstatements communicated by the practitioner, the practitioner shall obtain an understanding of management’s reasons for not doing so and shall consider that understanding when forming the practitioner’s conclusion. (Ref: Para. A483)

Evaluating the Effect of Uncorrected Misstatements

1. Prior to evaluating the effect of uncorrected misstatements, the practitioner shall consider whether the results of procedures performed and evidence obtained indicate that materiality needs to be revised.
2. The practitioner shall determine whether uncorrected misstatements are material, individually or in the aggregate. In making this determination, the practitioner shall consider the size and nature of the misstatements, and the particular circumstances of their occurrence. (Ref: Para. A484–A498)

Documentation