ISCA Issues SSA 315 (Revised 2021) and Conforming Amendments to Other Singapore Standards

SSA 315 (Revised 2021) deals with the auditor’s responsibility to identify and assess the risks of material misstatement in the financial statements. The revised standard is based on the International Standard on Auditing (ISA) 315 (Revised 2019) issued by the International Auditing and Assurance Standards Board (IAASB).

The key enhancements made to the extant SSA 315 (Revised 2021) include:

• Enhancing considerations in relation to the entity’s use of IT and the impact of this on the audit, for example, an additional requirement to include in the risk assessment procedures, an understanding of the extent to which the business model of the entity integrates the use of IT

• Enhancing the application of professional skepticism in audits
  • Introducing requirement to design and perform risk assessment procedures in a manner that is not biased towards obtaining audit evidence that may be corroborative or towards excluding audit evidence that may be contradictory
  • Introducing requirement to “stand-back” and evaluate all audit evidence obtained from risk assessment procedures, whether corroborative or contradictory

• New concepts and definitions used in identifying and assessing risks of material misstatement
  • Introducing the concept of a spectrum of inherent risk and clarifying how significant risk is to be applied to it
  • Clarifying the link between the identification and assessment of risks of material misstatement and responses to the assessed risks

• Clarifying the nature and extent of work to be performed when obtaining an understanding of the components of the entity’s system of internal control

• Enhancing and clarifying the need for auditors to understand the entity’s organisational structure, ownership and governance, business model and business risks

Click here for SSA 315 (Revised 2021).

Arising from SSA 315 (Revised 2021), conforming amendments are made to other relevant standards:

• SSA 200, Overall objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Singapore Standards on Auditing

• SSA 210, Agreeing the Terms of Audit Engagements

• SSA 230, Audit Documentation

• SSA 240, The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements

• SSA 250 (Revised), Consideration of Laws and Regulations in an Audit of Financial Statements

• SSA 260 (Revised), Communication with Those Charged with Governance

• SSA 265, Communicating Deficiencies in Internal Control to Those Charged with Governance

• SSA 300, Planning an Audit of Financial Statements

• SSA 320, Materiality in Planning and Performing an Audit

• SSA 330, The Auditor’s Responses to Assessed Risks

• SSA 402, Audit Considerations Relating to an Entity Using a Service Organization

• SSA 500, Audit Evidence

• SSA 501, Audit Evidence—Special Considerations for Selected Items

• SSA 505, External Confirmations

• SSA 520, Analytical Procedures

• SSA 530, Audit Documentation

• SSA 540 (Revised), Auditing Accounting Estimates and Related Disclosures

• SSA 550, Related Parties

• SSA 570, Going Concern

• SSA 600, Special Considerations—Audits of Group Financial Statements (Including the Work of Component Auditors)

• SSA 610 (Revised 2013), Using the Work of Internal Auditors

• SSA 620, Using the Work of an Auditor’s Expert

• SSA 700, Forming an Opinion and Reporting on Financial Statements

• SSA 701, Communicating Key Audit Matters in the Independent Auditor’s Report

• SSA 720 (Revised), The Auditor’s Responsibilities Relating to Other Information

Click here for the list of conforming amendments arising from SSA 315 (Revised 2021).

Effective Date

The revised standard is effective for audits of financial statements for periods beginning on or after 15 December 2021.