ISA 315 - IDENTIFYING AND ASSESSING THE RISK OF MATERIAL MISSTATEMENTS THROUGH UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT

 The ISA 315 deals with the auditor’s responsibility to identify and assess the risks of material misstatement in the financial statements using the  understanding the company and its environment, including the company’s internal control.

The objective of the standard is to outline the auditor’s responsibility to identify and assess the risks of material misstatement, whether due to fraud or error, at the financial statement and assertion levels in order to provide a basis for designing and implementing responses to the assessed risks of material misstatement.

ISA 315 requires the auditor to perform risk assessment procedures, understand the Entity and its environment, including the Entity's internal control system, identify and assess the risks of material misstatement, and document the procedures performed.

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