Guide to Using International Standards on Auditing in - IFAC

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104 9. Responding <strong>to</strong> Assessed Risks Chapter Content Relevant ISAs Designing and implementing appropriate responses <strong>to</strong> assessed risks. 240, 300, 330, 500 Exhibit 9.0-1 At Financial Statement Level Assessed Risks... Audi<strong>to</strong>r’s Response At Assertion Level Overall Response Further Audit Procedures Examples include: unpredictability of planned procedures Substantive procedures Tests of detail Tests of control Substantive Analytical Result Sufficient appropriate audit evidence <strong>to</strong> reduce audit risk <strong>to</strong> an acceptably low level Paragraph # ISA Objectives 330.3 The objective of the audi<strong>to</strong>r is <strong>to</strong> obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement, through designing and implementing appropriate responses <strong>to</strong> those risks.
105 <strong>Guide</strong> <strong>to</strong> <strong>Using</strong> <strong>International</strong> <strong>Standards</strong> on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts Paragraph # Relevant Extracts from ISAs 300.9 The audi<strong>to</strong>r shall develop an audit plan that shall include a description of: (a) The nature, timing and extent of planned risk assessment procedures, as determined under ISA 315. (b) The nature, timing and extent of planned further audit procedures at the assertion level, as determined under ISA 330. (c) Other planned audit procedures that are required <strong>to</strong> be carried out so that the engagement complies with ISAs. (Ref: Para. A12) 330.7 In designing the further audit procedures <strong>to</strong> be performed, the audi<strong>to</strong>r shall: (a) Consider the reasons for the assessment given <strong>to</strong> the risk of material misstatement at the assertion level for each class of transactions, account balance, and disclosure, including: (i) The likelihood of material misstatement due <strong>to</strong> the particular characteristics of the relevant class of transactions, account balance, or disclosure (i.e., the inherent risk); and (ii) Whether the risk assessment takes account of relevant controls (i.e., the control risk), thereby requiring the audi<strong>to</strong>r <strong>to</strong> obtain audit evidence <strong>to</strong> determine whether the controls are operating effectively (i.e., the audi<strong>to</strong>r intends <strong>to</strong> rely on the operating effectiveness of controls in determining the nature, timing and extent of substantive procedures); and (Ref: Para. A9-A18) (b) Obtain more persuasive audit evidence the higher the audi<strong>to</strong>r’s assessment of risk. (Ref: Para. A19) 500.6 The audi<strong>to</strong>r shall design and perform audit procedures that are appropriate in the circumstances for the purpose of obtaining sufficient appropriate audit evidence. (Ref: Para. A1-A25) 9.1 Overview Risk assessment procedures (see Volume 1, Chapter 8 of this <strong>Guide</strong>) are designed <strong>to</strong> identify and assess risks at both the financial statement level and the assertion level for material classes of transactions, account balances, and disclosures. Further audit procedures (see Volume 1, Chapter 10 of this <strong>Guide</strong>) are designed <strong>to</strong> be responsive <strong>to</strong> the assessed risks of material misstatement at the assertion level. Their purpose is <strong>to</strong> obtain sufficient appropriate audit evidence <strong>to</strong> reduce audit risk <strong>to</strong> an acceptably low level.
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Guide to Using International Standards on Auditing in - IFAC

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