Sylph 070214 ISA 450.pdf

FEE comments on the Exposure Draft of the proposed redrafted International Standard on Auditing (ISA) 450, "Evaluation of Misstatements Identified during the Audit". FEE supports ISA 450 as an improvement on the existing standard but suggests several changes to enhance it.

FEE disagrees with the requirement to categorize misstatements into three categories and document the distinction, as it is unclear and may be difficult to apply in practice. Instead, FEE proposes that categorization should be part of the Application and Other Explanatory Material.

FEE also comments on the definition of misstatements, suggesting that the explanation of different types of misstatements should be placed in Application and Other Explanatory Material rather than in the definition.

Additionally, FEE provides comments on other requirements, including the need for application guidance on paragraph 9, and suggests changes to paragraphs 15, 16, and 17 to make them less prescriptive and more focused on the auditor's judgment.

FEE responds to the IAASB's request for responses on questions, stating that the objective of the proposed redrafted ISA is appropriate, but raises concerns about the consistency and applicability of certain requirements.