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
The Required Understanding of the Entity and Its Environment, Including the Entity's Internal Control
The Entity and Its Environment
Industry, Regulatory and Other External Factors (Ref: Para. 11(a) )
Industry Factors
A17.Relevant industry factors include industry conditions such as the competitive environment, supplier and customer relationships, and technological developments. Examples of matters the auditor may consider include:
 dotbulletThe market and competition, including demand, capacity, and price competition.
 dotbulletCyclical or seasonal activity.
 dotbulletProduct technology relating to the entity's products.
 dotbulletEnergy supply and cost.
A18.The industry in which the entity operates may give rise to specific risks of material misstatement arising from the nature of the business or the degree of regulation. For example, long-term contracts may involve significant estimates of revenues and expenses that give rise to risks of material misstatement. In such cases, it is important that the engagement team include members with sufficient relevant knowledge and experience.6
6 ISA (UK and Ireland) 220, "Quality Control for an Audit of Financial Statements," paragraph 14.
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