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Canadian Auditing Standards

Identifying and Assessing the Risks of Material Misstatement

Summary

There are challenges involved in identifying and assessing audit risks for entities — in particular, those that vary in size and nature. Clearer or additional guidance is needed to help address these challenges.

Staff Contact(s)

Johanna Field, CPA, CA Associate Director, Auditing and Assurance Standards Board

Phone number  +1 416 204 2974
Email address  [email protected]

Project Status

  • Information gathering

    Completed prior to 2016

  • Approving project

    The IAASB approved the project in 2016

  • Consulting stakeholders

    The Exposure Draft was issued September 2018

    Video conference discussions held September 2018

    Field testing of the proposed standard by stakeholders done in September 2018

  • Deliberating feedback

    Feedback considered and an AASB response letter developed on the IAASB Exposure Draft

  • Final pronouncement

    Final Handbook material approved in December 2019

    Revised CAS 315, Identifying and Assessing the Risks of Material Misstatement now available in the CPA Canada Handbook – Assurance

    Effective for audits of financial statements for periods beginning on or after December 15, 2021

    Handbook

News

May 4, 2020 International Activity
ISA 315 Key Revisions Explained

This Introduction provides an overview of the changes the IAASB made to ISA 315, Identifying and Assessing the Risks of Material Misstatement, and related conforming and consequential amendments.

January 2, 2020 International Activity
IAASB Update – Enhanced and Modernized ISA 315 for a More Robust Risk Assessment

The International Auditing and Assurance Standards Board (IAASB) released International Standard on Auditing (ISA) 315 (Revised 2019). It is an important part of the IAASB’s efforts to improve global audit quality and keep up with the evolving environment in which businesses operate. It becomes effective for financial statement audits for periods beginning on or after December 15, 2021.

November 22, 2018 International Activity
AASB Response – Identifying and Assessing the Risks of Material Misstatement

The Board submitted a comment letter responding to the IAASB’s Exposure Draft, Proposed International Standard on Auditing 315 (Revised), Identifying and Assessing the Risks of Material Misstatement. Read the Board’s response for full details.

Meeting & event summaries

December 23, 2019 AASB Decision Summary — December 2-3, 2019

The AASB approved Canadian Auditing Standard (CAS) 315, Identifying and Assessing the Risks of Material Misstatement, including the related conforming amendments to other standards.

There were no changes made from a Canadian standpoint (i.e., there was no addition, modification, or deletion of a Canadian amendment) in finalizing the standard. Therefore, no re-exposure was necessary.

CAS 315 will be effective for audits of financial statements for periods beginning on or after December 15, 2021.

Once the Auditing and Assurance Standards Oversight Council (AASOC) confirms that the AASB followed due process with proper regard for the public interest, CAS 315 will be included in the CPA Canada Handbook – Assurance update in May 2020.

September 10, 2019 AASB Decision Summary – September 9-10, 2019 Meeting

The AASB provided input to the IAASB members from Canada on issues related to proposed ISA 315 (Revised), Identifying and Assessing the Risks of Material Misstatement. The Board discussed:

  • changes to the proposed requirements for understanding components of internal control;
  • the proposed effective date; and
  • re-exposure considerations of the final revised ISA 315.

The IAASB expects to approve ISA 315 (Revised) in September 2019 and issue it in November 2019. The AASB plans to approve the Canadian equivalent standard shortly thereafter.

June 10, 2019 AASB Decision Summary — June 10-11, 2019

The AASB provided input to the IAASB members from Canada on issues related to proposed ISA 315 (Revised), Identifying and Assessing the Risk of Material Misstatement. The Board discussed the IAASB’s:

  • proposed approach to presenting the requirements and application material;
  • proposed changes to the requirements, application material, and appendices; and
  • proposed consequential amendments to ISA 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with International Standards on Auditing.

The Board will continue to discuss this project at future meetings.

Disclaimer

This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.