Acca aa s21 Notes

5. Where ROMM can be found
ROMM may exist and must therefore be assessed at two levels:
(1)
Financial statement level
(2)
Assertion levels.
5.1. Financial statement level
Risks at the financial statement level are those that relate to the financial statements 
as a whole
and 
potentially affect many assertions. For example, the risks arising from fraud or a deficient control 
environment or significant doubts about going concern. The 
auditor's response
to such risks may 
include: 
๏
Assigning more experienced audit staff
๏
Designing audit procedures that are less predictable
๏
Exercising greater supervision over audit work. 
5.2. Assertion level
At the assertion level, essentially any single figure which appears in the financial statements is making 
assertions. For example, it is saying something about its accuracy, its measurement, completeness and 
occurrence (of a transaction) or existence (of an asset or liability).
At the assertion level, the nature, timing and extent of audit procedures must be designed to respond 
to the assessed risks (ISA 330). For example, if you are worried about receivables valuation you have to 
do a lot more work verifying that receivables are recoverable. It may be possible to wait for several 
months after the year end to see which customers actually pay. Assertions are described in more 
detail in Chapter 10.
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5.3. IAS 315 (Revised 2019) 
ISA 315 (Revised 2019) introduced new concepts and definitions to assist with the identification and 
assessment of risks of material misstatement:
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