AU-C 330 Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained

AU-C Original Pronouncement

Source Statement on Auditing Standards (SAS) 122.

Definitions of Terms

  1. Substantive procedure. An audit procedure designed to detect material misstatements at the assertion level. Substantive procedures comprise:
    1. Tests of details (classes of transactions, account balances, and disclosures), and
    2. Substantive analytical procedures.
  2. Test of controls. An audit procedure designed to evaluate the operating effectiveness of controls in preventing, or detecting and correcting, material misstatements at the assertion level.

Objective of AU-C Section 330

AU-C Section 330.03 states that:

…the objective of the auditor is to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement through designing and implementing appropriate responses to those risks.


Sections 330 and 315 are the centerpiece of the risk assessment standards. Together, these two sections provide detailed guidance on how to apply the audit risk model described in Section 320. That model describes audit risk as:


where AR is audit risk, RMM is the risk of material misstatement, and DR is detection risk. The RMM is a combination of inherent and control risk. Although the standard describes a combined risk assessment, the auditor ...

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