The auditor shall accumulate misstatements identified during the audit, other than those that are clearly trivial. (Ref: Para. A2‑A6)

The auditor shall determine whether the overall audit strategy and audit plan need to be revised if:

1. The nature of identified misstatements and the circumstances of their occurrence indicate that other misstatements may exist that, when aggregated with misstatements accumulated during the audit, could be material; or (Ref: Para. A7)
2. The aggregate of misstatements accumulated during the audit approaches materiality determined in accordance with ASA 320. (Ref: Para. A8)

If, at the auditor’s request, management has examined a class of transactions, account balances or disclosures and corrected misstatements that were detected, the auditor shall perform additional audit procedures to determine whether misstatements remain. (Ref: Para. A9)

The auditor shall communicate, unless prohibited by law or regulation, on a timely basis all misstatements accumulated during the audit with the appropriate level of management.^[3]  The auditor shall request management to correct those misstatements. (Ref: Para. A10‑A12)

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 report as a whole is free from material misstatement. (Ref: Para. A13)

Prior to evaluating the effect of uncorrected misstatements, the auditor shall reassess materiality determined in accordance with ASA 320 to confirm whether it remains appropriate in the context of the entity’s actual financial results. (Ref: Para. A14‑A15)

The auditor shall determine whether uncorrected misstatements are material, individually or in aggregate.  In making this determination, the auditor shall consider:

1. The size and nature of the misstatements, both in relation to particular classes of transactions, account balances or disclosures and the financial report as a whole, and the particular circumstances of their occurrence; and (Ref: Para. A16‑A22, A24‑A25)
2. The effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial report as a whole. (Ref: Para. A23)

Communication with Those Charged with Governance

The auditor shall communicate with those charged with governance uncorrected misstatements and the effect that they, individually or in aggregate, may have on the opinion in the auditor’s report, unless prohibited by law or regulation.^[4]  The auditor’s communication shall identify material uncorrected misstatements individually.  The auditor shall request that uncorrected misstatements be corrected. (Ref: Para. A26‑A28)

The auditor shall also communicate with those charged with governance the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial report as a whole.

The auditor shall request a written representation from management and, where appropriate, those charged with governance whether they believe the effects of uncorrected misstatements are immaterial, individually and in aggregate, to the financial report as a whole.  A summary of such items shall be included in or attached to the written representation. (Ref: Para. A29) 

The auditor shall include in the audit documentation:^[5] (Ref: Para. A30)

1. The amount below which misstatements would be regarded as clearly trivial (see paragraph 5 of this Auditing Standard);
2. All misstatements accumulated during the audit and whether they have been corrected (see paragraphs 5, 8 and 12 of this Auditing Standard); and
3. The auditor’s conclusion as to whether uncorrected misstatements are material, individually or in aggregate, and the basis for that conclusion (see paragraph 11 of this Auditing Standard).