Auditing Standard ASA 315 Identifying and …

1 Compiled Auditing Standard ASA 315 (December 2015) Auditing Standard ASA 315 Identifying and Assessing the Risks of material misstatement through understanding the entity and Its environment This compilation was prepared on 1 December 2015 taking into account amendments made by ASA 2011-1, ASA 2013-2 and ASA 2015-1 Prepared by the Auditing and Assurance Standards Board ASA 315 - compiled - 2 - Auditing Standard Obtaining a Copy of this Auditing Standard The most recently compiled versions of Auditing Standards, original Standards and amending Standards (see Compilation Details) are available on the AUASB website: Contact Details Auditing and Assurance Standards Board Podium Level Level 14, 530 Collins Street Melbourne Victoria 3000 AUSTRALIA Phone: (03) 8080 7400 E-mail: Postal Address: PO Box 204 Collins Street West Melbourne Victoria 8007 AUSTRALIA COPYRIGHT 2015 Commonwealth of Australia.

2 The text, graphics and layout of this Auditing Standard are protected by Australian copyright law and the comparable law of other countries. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source as being the Australian Auditing and Assurance Standards Board (AUASB). Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to the Executive Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to Otherwise, no part of this Auditing Standard may be reproduced, stored or transmitted in any form or by any means without the prior written permission of the AUASB except as permitted by law.

3 This Auditing Standard reproduces substantial parts of the corresponding International Standard on Auditing issued by the International Auditing and Assurance Standards Board (IAASB) and published by the International Federation of Accountants (IFAC), in the manner described in the statement on Conformity with International Standards on Auditing . The AUASB acknowledges that IFAC is the owner of copyright in the International Standard on Auditing incorporated in this Auditing Standard throughout the world. All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only.

4 Further information and requests for authorisation to reproduce this Auditing Standard for commercial purposes outside Australia should be addressed to the Executive Director, Auditing and Assurance Standards Board, PO Box 204, Collins Street West, Melbourne, Victoria 8007 or sent to Any decision to approve a request may also require the agreement of IFAC. ISSN 1833-4393 Auditing Standard ASA 315 Identifying and Assessing the Risks of material misstatement through understanding the entity and Its environment ASA 315 - compiled - 3 - Auditing Standard CONTENTS COMPILATION DETAILS AUTHORITY STATEMENT CONFORMITY WITH INTERNATIONAL STANDARDS ON Auditing Paragraphs Application.

5 Aus Operative Date .. Aus Introduction Scope of this Auditing Standard .. 1 Effective Date .. 2 Objective .. 3 Definitions .. 4 Requirements Risk Assessment Procedures and Related Activities .. 5-10 The Required understanding of the entity and its environment , Including the entity s Internal Control .. 11-24 Identifying and Assessing the Risks of material misstatement .. 25-31 Documentation .. 32 Application and Other Explanatory material Risk Assessment Procedures and Related Activities ..A1-A24 The Required understanding of the entity and Its environment , Including the entity s Internal Control ..A25-A121 Identifying and Assessing the Risks of material misstatement .

6 A122-A151 Documentation ..A152-A155 Appendix 1: Internal Control Components Appendix 2: Conditions and Events That May Indicate Risks of material misstatement Auditing Standard ASA 315 Identifying and Assessing the Risks of material misstatement through understanding the entity and Its environment ASA 315 - compiled - 4 - Auditing Standard COMPILATION DETAILS Auditing Standard ASA 315 Identifying and Assessing the Risks of material misstatement through understanding the entity and Its environment (as Amended) This compilation takes into account amendments made up to and including 1 December 2015 and was prepared on 1 December 2015 by the Auditing and Assurance Standards Board (AUASB).

7 This compilation is not a separate Auditing Standard made by the AUASB. Instead, it is a representation of ASA 315 (October 2009) as amended by other Auditing Standards which are listed in the Table below. Table of Standards Standard Date made Operative Date ASA 315 [A] 27 October 2009 Financial reporting periods commencing on or after 1 January 2010 ASA 2011-1 [B] 27 June 2011 Financial reporting periods commencing on or after 1 July 2011 ASA 2013-2 [C] 11 November 2013 Financial reporting periods commencing on or after 1 January 2014 ASA 2015-1 [D] 1 December 2015 Financial reporting periods ending on or after 15 December 2016 [A] Federal Register of Legislative Instruments registration number F2009L04079, 12 November 2009 [B] Federal Register of Legislative Instruments registration number F2011L01379, 30 June 2011 [C]

8 Federal Register of Legislative Instruments registration number F2013L01939, 14 November 2013 [D] Federal Register of Legislative Instruments registration number F2015L02032, 16 December 2015 Table of Amendments Paragraph affected How affected By .. [paragraph] A26 Amended ASA 2011-1 [28] Appendix 1 Para. 3 Amended ASA 2011-1 [29] Appendix 1 Sub-heading above Para. 5 Amended ASA 2011-1 [30] 6(a) Amended ASA 2013-2 [58] 22 Amended ASA 2013-2 [59] Auditing Standard ASA 315 Identifying and Assessing the Risks of material misstatement through understanding the entity and Its environment ASA 315 - compiled - 5 - Auditing Standard Paragraph affected How affected By.

9 [paragraph] 23 Amended ASA 2013-2 [60] 23 and Footnote 1 Amended ASA 2013-2 [61] Heading above paragraph A6 Amended ASA 2013-2 [62] A6-A7 Amended ASA 2013-2 [63] A7 and Footnote 5 Addition ASA 2013-2 [64] A8-A13 Additions ASA 2013-2 [65] A9 and Footnote 6 Addition ASA 2013-2 [66] A11 and Footnote 7 Addition ASA 2013-2 [67] Paragraph numbers Re-numbered ASA 2013-2 [68] [70] [76] Footnote references Re-numbered ASA 2013-2 [68] A79 Addition ASA 2013-2 [69] Heading above paragraph A109 Amended ASA 2013-2 [71] A109 Amended ASA 2013-2 [72] A110-A111 Amended ASA 2013-2 [73] A112 Amended ASA 2013-2 [74] A113-A116 Additions ASA 2013-2 [75] 18 Amended ASA 2015-1 [58] 26 Amended ASA 2015-1 [59] A1 Amended ASA 2015-1 [60] A19 Amended ASA 2015-1 [61] A22 Addition ASA 2015-1 [62-63] A27 Amended ASA 2015-1 [65] A31 Amended ASA 2015-1 [66] Aus Deleted ASA 2015-1 [64] A32 Amended ASA 2015-1 [67] A81 Amended ASA 2015-1 [68] A91 Addition ASA 2015-1 [69 and 71] Footnote 15 Addition ASA 2015-1 [70] A92 Addition ASA 2015-1 [72-73] A96 Amended ASA 2015-1 [74] A103 Addition ASA 2015-1 [75-76] A123 Amended ASA 2015-1 [77] A125 (pre-existing paragraph)

10 Deleted ASA 2015-1 [85] A127 Amended ASA 2015-1 [78] Heading above paragraph A128 Addition ASA 2015-1 [80] A128 Amended ASA 2015-1 [81] Heading above paragraph A129 Addition ASA 2015-1 [82] A129 Addition ASA 2015-1 [83-84] A131 Amended ASA 2015-1 [86] Footnote 17 Addition ASA 2015-1 [87] A132 Amended ASA 2015-1 [88] A133 Addition ASA 2015-1 [89 and 91] Footnote 18 Addition ASA 2015-1 [90] Footnote 19 Addition ASA 2015-1 [90] A134 Addition ASA 2015-1 [92-93] Heading above paragraph A135 Addition ASA 2015-1 [94] A135 Addition ASA 2015-1 [95-96] Heading above paragraph A136 Addition ASA 2015-1 [97] A136 Addition ASA 2015-1 [98-99] Appendix 2 Amended ASA 2015-1 [100] Auditing Standard ASA 315 Identifying and Assessing the Risks of material misstatement through understanding the entity and Its environment ASA 315 - compiled - 6 - Auditing Standard AUTHORITY STATEMENT Auditing Standard ASA 315 Identifying and Assessing the Risks of material misstatement through understanding the entity and Its environment (as amended to 1 December 2015) is set out in paragraphs Aus to A155 and Appendices 1 and 2.