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ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement

ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement. Fiona Campbell, ISA 315 Task Force Chair & Deputy Chair of the IAASB IAASB Meeting – New York, USA Agenda Item 2 September 16, 2019. ISA 315 (Revised)‒NEW in September. Introductory paragraphs Public sector

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ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement

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  1. ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement Fiona Campbell, ISA 315 Task Force Chair & Deputy Chair of the IAASB IAASB Meeting – New York, USA Agenda Item 2 September 16, 2019

  2. ISA 315 (Revised)‒NEW in September Introductory paragraphs Public sector Automated tools and techniques • Supported by Technology Working Group Q&A Translations Effective date Page 3

  3. Summary of CAG Representatives Comments Broadly supported the changes to address understandability and length; a few concerns about use of tables Significant risk definition • “Combination” of likelihood and magnitude – should it rather be the ‘intersection’ • Clarify ‘in rare circumstances’ where may not be a significant risk Inherent risk factors – supportive of changes to use fraud risk factors Paragraph 39(a)(ii) is confusing, and may go further than intended in particular in relation to documentation Threshold for identifying risks of material misstatement – description in revised ISA 200 conforming amendments clearer SMP Committee Representative thanked the IAASB for the opportunity to input to the revisions; encouraged that the standard is finalized but had the view that a longer implementation period is needed Majority CAG Representatives would like standard finalized (i.e., no re-exposure)

  4. Offline Comments – Significant Aspects for Further Consideration Definition of relevant assertions Hanging paragraph – Para 17 Inherent risk factors and the way we describe consideration of the inherent risk factors in paragraph 23(c) Paragraph 39(a)(ii) Threshold for identifying risks of material misstatement (ISA 200 CA)

  5. ISA 315 (Revised) Question 3 What are the Board’s views about: • Definitions • Requirements • Application material • Appendices Full standard presented in clean – Agenda Item 2-E (The Task Force Chair will walk through the standard – relevant paragraph numbers to follow) Page 6

  6. ISA 315 (Revised)‒Introductory Paragraphs Effective Date & Objective to be added back Page 7

  7. ISA 315 (Revised)‒Definitions Page 8

  8. ISA 315 (Revised)‒Risk Assessment Procedures and Related Activities Page 9

  9. ISA 315 (Revised)‒Understanding the Entity & Its Environment / Applicable Financial Reporting Framework Page 10

  10. ISA 315 (Revised)‒Understanding the Components of the Entity’s System of IC Page 11

  11. ISA 315 (Revised)‒Understanding the Components of the Entity’s System of IC Page 12

  12. ISA 315 (Revised)‒Identifying & Assessing the Risks of Material Misstatement Page 13

  13. ISA 315 (Revised)‒Assessing the Risks of Material Misstatement Page 14

  14. ISA 315 (Revised) Evaluating Audit Evidence from Risk Assessment Procedures Stand-back Page 15

  15. ISA 315 (Revised) Revision of Risk Assessment Documentation Page 16

  16. ISA 315 (Revised)‒Appendices

  17. Effective Date What are the Board’s views about the proposed implementation date? Question 2

  18. ISA 315 (Revised) ‒ Conforming Amendments Page 19

  19. Changing the interpretation of “could” in Definition of RoMM and re-defining Significant Risks

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