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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Planning, materiality and assessing the risk of material misstatement

Zenith Audit is planning the audit of Korvan Ltd. Under ISA 315 (Revised 2019), at which two levels must the auditor identify and assess the risks of material misstatement?

The auditor must identify and assess risks of material misstatement at the overall financial statement level and at the assertion level for classes of transactions, balances and disclosures. This is required by ISA 315 (Revised 2019) to provide a basis for designing further audit procedures.

  1. AFinancial statement level and assertion levelCorrect
  2. BEntity level and group level
  3. CInherent level and control level only
  4. DAccount balance level and disclosure level only

Explanation

ISA 315 (Revised 2019) requires the auditor to identify and assess risks of material misstatement at the financial statement level and at the assertion level for classes of transactions, account balances and disclosures. The other options are not the two levels specified in the standard.

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