ISA 315

ISA 315 – Objective

The objective of the auditor is to identify and assess the risks of material misstatement, whether due to fraud or error, at the financial statement and assertion levels, through understanding the entity and its environment, including the entity’s internal control, thereby providing a basis for designing and implementing responses to the assessed risks of material misstatement.

ISA 315 – Definitions

Assertions: Representations by management, explicit or otherwise, that are embodied in the financial statements, as used by the auditor to consider the different types of potential misstatements that may occur. Read more

ISA 315 – Requirements

Risk Assessment Procedures and Related Activities

  • The auditor shall perform risk assessment procedures to provide a basis for the identification and assessment of risks of material misstatement at the financial statement and assertion levels. Read more

Risk Assessment Methods

The entity’s risk assessment process

The information system, including the related business processes, relevant to financial reporting, and communication

Control activities relevant to the audit

The auditor shall obtain an understanding of control activities relevant to the audit, being those the auditor judges it necessary to understand in order to assess the risks of material misstatement at the assertion level and design further audit procedures responsive to assessed risks … Read more

Identifying and Assessing the Risks of Material Misstatement

The auditor shall identify and assess the risks of material misstatement at … Read more

Risks That Require Special Audit Consideration

Risks for Which Substantive Procedures Alone Do Not Provide Sufficient Appropriate Audit Evidence

  • In respect of some risks, the auditor may judge that it is not possible or practicable to obtain sufficient appropriate audit evidence only from substantive procedures. Such risks may relate to the inaccurate or incomplete recording of routine and significant classes of transactions or account balances, the characteristics of which often permit highly automated processing with little or no manual intervention. In such cases, the entity’s controls over such risks are relevant to the audit and the auditor shall obtain an understanding of them.

Revision of Risk Assessment

  • The auditor’s assessment of the risks of material misstatement at the assertion level may change during the course of the audit as additional audit evidence is obtained. In circumstances where the auditor obtains audit evidence from performing further audit procedures, or if new information is obtained, either of which is inconsistent with the audit evidence on which the auditor originally based the assessment, the auditor shall revise the assessment and modify the further planned audit procedures accordingly.

ISA 315 – Documentation

The auditor shall include in the audit documentation:

  1. The discussion among the engagement team were required by paragraph 10, and the significant decisions reached … Read more

ISA 315 – The Use of Assertions

  • In representing that the financial statements are in accordance with the applicable financial reporting framework, management implicitly or explicitly makes assertions … Read more

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