ISA 330- Using substantive procedures as a response to assesed risks

Author:ec. Carmen MATARAGIU, ec. Anca Cristina PENTEK

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Keywords:procedures, risks, material tranzactions, professional judgement, audit evidences

Abstract:
The use of substantive procedures generates answers which allow the auditor to identify the risk of material misstatements offering a basis for the proper approach of the audit mission. \r\n\r\nThe substative procedures applied by the auditor must respond to the risk of material misstatement established by the auditor for each:\r\n- Class of transactions;\r\n- Account balances;\r\n- Disclosures and analytical procedures.\r\n\r\nThe timing, nature and the extent of the performance of substantive procedures are decisive in the process of obtaining sufficient audit evidence, which are capable to respond to the material misstatement assesed risks at the financial statements level, as well as at the level of the related disclosures. \r\n\r\nThe sufficiency and appropriateness of the audit evidence which must sustain the auditor’s conclusions throughout the audit is a matter of professional reasoning which can be influenced by factors such as:\r\n- Significance of the potential misstatement in the assertion and the likelihood of it having a material effect, individually or aggregated with other potential misstatements, on the financial statements\r\n- The results of the audit procedures performed\r\n- The source and credibility of the available information \r\n- The persuasiveness of the audit evidence\r\n- Understanding the entity and its environment, including its internal control

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