IFAC Releases New Implementation Tool for Auditors on Identifying and Assessing Risks of Material Misstatement

The International Federation of Accountants (IFAC)  released on Dec 15, 2022 a new resource, The Risk Identification and Assessment Process: Tips on Implementing ISA 315 (Revised 2019). The tool helps auditors implement the International Auditing and Assurance Standards Board’s (IAASB) International Standard on Auditing (ISA) 315 (Revised 2019), Identifying and Assessing the Risks of Material Misstatement, which is effective for audits of financial statements for periods beginning on or after December 15, 2021.

The implementation tool provides an overview of core concepts and explains new and previously existing requirements. It also includes examples and emphasizes the scalability of the standard with a focus on less complex entities. The tool does not replace the need to read ISA 315 (Revised 2019), including its application and other explanatory material.

The resource is based on Chartered Professional Accountants of Canada’s (CPA Canada) Implementation Tool for Auditors and follows the release earlier this year of IFAC’s Auditing Accounting Estimates: ISA 540 (Revised) Implementation Tool. These tools support efforts to improve audit quality globally and, more broadly, international standards’ adoption and implementation. Additional guidance and resources are available on the dedicated Supporting International Standards section of the IFAC Knowledge Gateway.