| 27. | As part of the risk assessment as described in paragraph 25, the auditor shall determine whether any of the risks identified are, in the auditor's judgment, a significant risk. In exercising this judgment, the auditor shall exclude the effects of identified controls related to the risk. |
| 28. | In exercising judgment as to which risks are significant risks, the auditor shall consider at least the following: |
| (a) | Whether the risk is a risk of fraud; |
| (b) | Whether the risk is related to recent significant economic, accounting or other developments and, therefore, requires specific attention; |
| (c) | The complexity of transactions; |
| (d) | Whether the risk involves significant transactions with related parties; |
| (e) | The degree of subjectivity in the measurement of financial information related to the risk, especially those measurements involving a wide range of measurement uncertainty; and |
| (f) | Whether the risk involves significant transactions that are outside the normal course of business for the entity, or that otherwise appear to be unusual. (Ref: Para. A119-A123) |
| 29. | If the auditor has determined that a significant risk exists, the auditor shall obtain an understanding of the entity's controls, including control activities, relevant to that risk. (Ref: Para. A124-A126) |
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