IAASB Consults on Proposed Changes to ISA 315

The International Auditing and Assurance Standards Board (IAASB) is consulting on making changes to ISA 315 (Identifying and Assessing the Risks of Material Misstatement). The purpose of the auditing standards is to provide guidance to the users of it regarding the latest changes and developments in technology and the way businesses are operated around the world. 

The changes proposed by the board are not only expected to improve guidance but are also expected to provide companies with robust requirements to comply with when identifying the risks of material misstatements as well as assessing their potential impact on the entity’s financial statements. The purpose of the changes proposed in relation to ISA 315 is to improve the process of identifying and assessing the risks of material misstatements in financial statements of the entity being audited.

IAASB has said that it wants to modernise ISA 315 so that to meet changing business needs, including latest technology, and use of latest tools and modern techniques by auditors to perform audit procedures. The board is also seeking to improve the prospects surrounding the applicability of the standard among entities operating in different industries facing different situations and challenges. The standard board wants the auditors to focus more on exercising professional judgement as well as professional scepticism throughout the risk identification and assessment process.

The deadline for comment is November 2, 2018.