Transformation of ISA 315 as a response to the changing operating environment and the introduction of digital technologies

Subject. This article examines the revised requirements and recommendations of the current ISA 315 Standard – Identifying and Assessing the Risks of Material Misstatement, and compares them with the provisions of the previous redrafted Standard – Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment. Objectives. The article aims to analyze the new edition of the ISA 315 Standard, which reflects important changes that have been made in response to the changing operating environment of the organization and the use of information technology and financial reporting structure. Methods. For the study, we used classification, synthesis, and induction and deduction. Results. The article identifies the most important changes made to the revised ISA 315 Standard and describes a case of an internal control system assessment based on the relationship between the control environment, risk assessment process, information system, control activities and control procedures. Conclusions. The article concludes that the improvements and clarifications provided by the current ISA 315 Standard – Identifying and Assessing the Risks of Material Misstatement, help auditors to apply audit risk models in identifying and assessing risks of material misstatement.