Objective
The IAASB believes the Audit Risk Standards will increase audit quality as a result of better risk assessments through a more detailed understanding of the entity and its environment, including its internal control, and improved design and performance of audit procedures to respond to assessed risks of material misstatements. The improved linkage of audit procedures and assessed risks is expected to result in a greater concentration of audit effort on areas where there is a greater risk of material misstatement.
The approved Standards are:
- ISA 500 (Revised), Audit Evidence
- ISA 315, Understanding the Entity and its Environment and Assessing the Risks of Material Misstatement
- ISA 330, The Auditor's Procedures in Response to Assessed Risks
- An addition to ISA 200, Objective and General Principles Governing an Audit of Financial Statements
The approved Standards replace the following existing ISAs:
- ISA 310, Knowledge of the Business
- ISA 400, Risk Assessments and Internal Control
- ISA 401, Auditing in a Computer Information Systems Environment