Cas 315 Audit

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  • Topic: Auditing, Financial audit, Risk assessment
  • Pages : 4 (1072 words )
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  • Published : November 4, 2011
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CAS 315: Identifying and assessing the risks of material misstatement through understanding the entity and its environment Scope: This Canadian Auditing Standard (CAS) deals with the auditor's responsibility to identify and assess the risks of material misstatement in the financial statements, through understanding the entity and its environment, including the entity's internal control.

Effective Date: Effective for audits of F/S for periods ending on or after December 14, 2010.

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. ------------------------------------------------------------------------------------------------------------------------------------------ 1. The risk assessment procedures shall include the following: (a) Inquiries of management, and of others within the entity who in the auditor's judgment may have information that is likely to assist in identifying risks of material misstatement due to fraud or error. (b) Analytical procedures

(c) Observation and inspection

2. The auditor shall obtain an understanding of the following: (a) Relevant industry, regulatory, and other external factors (b) The nature of the entity, including:
i. its operations;
ii. its ownership and governance structures;
iii. the types of investments that the entity is making and plans to make, including investments in special-purpose entities; and iv. the way that the entity is structured and how it is financed, to enable the auditor to understand the classes of transactions, account balances, and disclosures to be expected in the financial statements. (c) The entity's selection...
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