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Documentation Of Significant Matters And Related Significant Professional Judgments

Judging the significance of a matter requires an objective analysis of the facts and circumstances.

An important factor in determining the form, content and extent of audit documentation of significant matters is the extent of professional judgment exercised in performing the work and evaluating the results. Documentation of the professional judgments made, where significant, serves to explain the auditor’s conclusions and to reinforce the quality of the judgment. Such matters are of particular interest to those responsible for reviewing audit documentation, including those carrying out subsequent audits, when reviewing matters of continuing significance (for example, when performing a retrospective review of accounting estimates).

Following are examples of  significant matters-



Matters that give rise to significant risks.


Results of audit procedures indicating


 That the financial statements could be materially misstated


A need to revise the auditor’s previous assessment of the risks of material misstatement and the auditor’s responses to those risks.


Circumstances that  cause  the  auditor  significant  difficulty  in  applying

necessary audit procedures.



Findings that could result in a modification to the audit opinion or the

inclusion of an Emphasis of Matter Paragraph in the auditor’s report.



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