Auditing and Assurance Standards and Guidance

Auditing Standards (Ireland)

FRC ISAs (UK and Ireland) applicable for periods beginning on or after 15 December 2010 but before 17 June 2016

ISA (UK and Ireland) 315 Identifying and assessing the risk of material misstatement through understanding the entity and its environment

ISA (UK and Ireland) 315 applicable for periods ending on or after 15 December 2010

Application and Other Explanatory Material

Risk Assessment Procedures and Related Activities (Ref: Para. 5 )

Discussion among the Engagement Team (Ref: Para. 10 )

A14.	The discussion among the engagement team about the susceptibility of the entity's financial statements to material misstatement:

Provides an opportunity for more experienced engagement team members, including the engagement partner, to share their insights based on their knowledge of the entity.

Allows the engagement team members to exchange information about the business risks to which the entity is subject and about how and where the financial statements might be susceptible to material misstatement due to fraud or error.

Assists the engagement team members to gain a better understanding of the potential for material misstatement of the financial statements in the specific areas assigned to them, and to understand how the results of the audit procedures that they perform may affect other aspects of the audit including the decisions about the nature, timing, and extent of further audit procedures.

Provides a basis upon which engagement team members communicate and share new information obtained throughout the audit that may affect the assessment of risks of material misstatement or the audit procedures performed to address these risks.

ISA (UK and Ireland) 240 provides further requirements and guidance in relation to the discussion among the engagement team about the risks of fraud.⁵

A15.

It is not always necessary or practical for the discussion to include all members in a single discussion (as, for example, in a multi-location audit), nor is it necessary for all of the members of the engagement team to be informed of all of the decisions reached in the discussion. The engagement partner may discuss matters with key members of the engagement team including, if considered appropriate, specialists and those responsible for the audits of components, while delegating discussion with others, taking account of the extent of communication considered necessary throughout the engagement team. A communications plan, agreed by the engagement partner, may be useful.

⁵ ISA (UK and Ireland) 240, paragraph 15.