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RESPONSES TO
ASSESSED RISKS
ISA 330
Auditor ‘s Responsibility
• ISA 330 deals with the responsibilities faced
by the auditor in designing & implementing
audit procedures which specifically respond
to the RMM.
The Two Fundamental Processes
Substantive Procedures
An audit procedure designed to detect material
misstatements at the assertion level.
It comprises:
1. Test of Details (of classes of transactions, account
balances & disclosures);
2. Substantive Analytical Procedures
Tests of Controls
An audit procedure designed to evaluate the
operating effectiveness of controls in preventing, or
detecting and correcting, material misstatements at
the assertion level.
“Responsive to the assessed RMM”
Relates to the auditor’s approach for
designing and performing further audit
procedures.
“Responsive to the assessed RMM”
The auditor may consider that TOC would not
be appropriate and, thus, gather sufficient
appropriate audit evidence from wholly
substantive approach.
Ineffective
Substantive Approach
Where the auditor considers a wholly
substantive approach appropriate, the auditor
shall be satisfied that performing only
substantive procedures would reduce the
RMM to an acceptably low level.