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The characteristics of financial instruments may obscure certain elements of risk and exposure. Obtaining an understanding of the instruments in which the entity has invested or to which it is exposed, including the characteristics of the instruments, …
Examples of matters that the auditor may consider when obtaining an understanding of the entity’s financial instruments include: To which types of financial instruments the entity is exposed. The use to which they are put. Management’s and, where …
In some cases, a contract, including a contract for a non-financial instrument may contain a derivative. Some financial reporting frameworks, including Australian Accounting Standards, permit or require such “embedded” derivatives to be separated from the …
When such a person’s expertise is in auditing and accounting, regardless of whether the person is from within or external to the firm, this person is considered to be part of the engagement team and is subject to the requirements of ASA 220 Quality …
A key consideration in audits involving financial instruments, particularly complex financial instruments, is the competence of the auditor. ASA 220 [15] requires the engagement partner to be satisfied that the engagement team, and any auditor’s experts …
See ASA 102 Compliance with Ethical Requirements when Performing Audits, Reviews and Other Assurance Engagements . …
Accordingly, auditing financial instruments may require the involvement of one or more experts or specialists, for example, in the areas of: Understanding the financial instruments used by the entity and their characteristics, including their level of …
The nature and use of particular types of financial instruments, the complexities associated with accounting requirements, and market conditions may lead to a need for the engagement team to consult [17] with other accounting and audit professionals, from …