TWSA450 Evaluation of Misstatements Identified during the Audit 　　　　

Status

Revised by Auditing Standards Committee in Taiwan on 4 October, 2022

Summary

This Standard deals with the auditor’s responsibility to evaluate the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements.

The auditor shall accumulate misstatements identified during the audit, other than those that are clearly trivial.

Unless prohibited by law or regulation, the auditor shall communicate on a timely basis all misstatements accumulated during the audit with the appropriate level of management, and shall request management to correct those misstatements.

If management refuses to correct some or all of the misstatements communicated by the auditor, the auditor shall obtain an understanding of management’s reasons for not making the corrections and shall take that understanding into account when evaluating whether the financial statements as a whole are free from material misstatement.

Prior to evaluating the effect of uncorrected misstatements, the auditor shall reassess materiality determined in accordance with TWSA320 to confirm whether it remains appropriate in the context of the entity’s actual financial results. The auditor shall determine whether uncorrected misstatements are material, individually or in aggregate.

Effective date

This Standard is effective from 15 December, 2022.