ISA 315 (Revised)

Objective

The objectives of the project are to:

(a) Propose revisions to ISA 315 (Revised), establishing more robust requirements and appropriately detailed guidance to drive auditors to perform appropriate risk assessment procedures in a manner commensurate with the size and nature of the entity. It is anticipated that these revisions will focus on enhancing the auditor’s approach to understanding the entity, its environment (including its internal control) and risk assessment activities in light of the changing environment.

(b) Determine whether and how ISA 315 (Revised), in its organization and structure, can be modified to promote a more effective risk assessment.

(c) Propose consequential amendments to other standards that may be necessary as a result of revisions to ISA 315 (Revised) (such as ISA 220, ISA 240, ISA 330 ISA 540 and ISA 600).

(d) Determine what non-authoritative guidance and support tools should be developed by the IAASB, or others, to supplement revisions to ISA 315 (Revised) thereby aiding its effective implementation. Non-authoritative guidance and support tools may include International Auditing Practice Notes (IAPNs), Staff publications, project updates, or illustrations / examples to provide assistance on how ISA 315 (Revised) could be applied, in particular to address concerns by auditors of SMEs.

PROJECT CONTACT

 TASK FORCE

Project Stages

Board Papers

December 2018 March 2019 June 2019 September 2019

Board Minutes

December 2018 March 2019 June 2019

CAG Papers

March 2019 September 2019

CAG Minutes

March 2019

Summary
MEETING HIGHLIGHTS - SEPTEMBER 2019

The Board approved the revisions to ISA 315 (Revised), as well as the related conforming amendments. The revised ISA will be effective for audits of financial statements for periods beginning on or after December 15, 2021. Once the Public Interest Oversight Board’s (PIOB) confirmation that due process was followed is received, the Board will formally release the standard.

In finalizing ISA 315 (Revised), the Board continued to focus on the understandability and complexity of the ISA, as well as the iterative nature of the standard. The Board continued to discuss the threshold for identifying risks of material misstatement and agreed the supporting guidance for this as a conforming amendment to ISA 200.

The Board has also recognized that support for those initially applying the changes to ISA 315 (Revised) is critical and will further consider the most appropriate actions in providing this initial support. The Board also acknowledged the need to monitor implementation challenges as they arise.


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