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Hi Kim,
When we are identifying and assessing risks of MM at both FS and Assertion level, do we assess significant risks for both levels? Or only for the Assertion level? I can see from the standard that it talks about significant risk at the assertion level but not at the FS level.
Thank you 🙂
CJAs a more recent standard, ISA 315 (Revised) is quite “involved”. Significant risk is a concept related to inherent risk at the assertion level. It’s summarised in our notes and ACCA’s article https://www.accaglobal.com/gb/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/risk-understanding-entity.html
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At the assertion level, the auditor’s response will depend on the spectrum of risk – from “must respond” for significant risks to “no further audit procedures” at the very low end.
However, the auditor must always respond with further audit procedures to a risk at the financial statement level.
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