Wiley Practitioner's Guide to GAAS 2020

12AU-C 330 Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained

Scope

Definitions of Terms

Objective of AU-C Section 330

Overview

Requirements

Overall Responses

Designing Further Audit Procedures

Tests of Controls

Substantive Procedures

Evaluating the Sufficiency and Appropriateness of the Audit Evidence Obtained

Documentation

Testing at Interim Dates

Misstatements Detected at Interim Dates

Designing Audit Procedures

Tests of Internal Control Operating Effectiveness

Types of Tests

SCOPE

AU-C 330 offers guidance to auditors when designing and implementing responses to risks of material misstatements identified under AU-C 330. (AU-C 330)

DEFINITIONS OF TERMS

Source: AU-C 330.04. For definitions related to this standard, see Appendix A, “Definitions of Terms”: Substantive procedure, Test of controls.

OBJECTIVE OF AU-C SECTION 330

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. (AU-C Section 330.03)

OVERVIEW

AU-C 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:

AR = RMM × DR

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 ...