The business environment is experiencing rapid technological developments, which are affecting the nature, volume, and sources of information used by entities in their operations and by auditors as audit evidence. There has also been an increase in the availability and sophistication of technology used in audit engagements that impact the auditor’s design and performance of procedures in obtaining and evaluating sufficient appropriate audit evidence.
The Audit Evidence and Risk Response project aims to concurrently address revisions to the following standards to holistically address the “reference framework” and the “performance” aspects of obtaining and evaluating audit evidence:
- CAS 330, The Auditor’s Responses to Assessed Risks;
- CAS 500, Audit Evidence; and
- CAS 520, Analytical Procedures.
This project builds on the work effort started by the Audit Evidence project that commenced in March 2019, and integrates the cumulative work undertaken by that project until March 2024.
In revising the standards, this project aims to:
- Enhance the application of professional judgment and professional skepticism exercised by auditors:
- when making judgments about information intended to be used as audit evidence, and evaluating whether sufficient appropriate audit evidence has been obtained; and
- when designing and implementing overall responses or designing and performing further audit procedures in response to assessed risks of material misstatement.
- Promote consistent practice and auditor behaviour by facilitating effective responses to risks of material misstatement, including by strengthening auditors’ work on internal controls.
- Facilitate and, where appropriate, encourage auditors’ use of technology in obtaining audit evidence and evaluating its sufficiency and appropriateness.