About:
- International Audit and Assurance Standards Board (IAASB) back in September 2019 approved major changes to ISA 315.
- The revisions will be effective for audits of financial statements for periods beginning on or after 15 December 2021.
- The effect of changes require audit firms of all sizes to revisit their approach to risk assessments.
Key changes:
- Introduction of five new inherent risk factors to aid in risk assessment; subjectivity, complexity, uncertainty, change and susceptibility to misstatement due to management bias.
- In determining significant risks, a new spectrum of risk, at the upper end of which lie significant risks
- Enhanced focus on IT general controls
- Inherent risks to be assessed separately from control risks
- Scalability considerations have been included
- Considerations specific to Automated Tools and Techniques
- Sufficient appropriate evidence to be obtained from risk assessment procedures as the basis for the risk assessment
- Greater emphasis on controls