ISA 315 (Identifying and Assessing the Risks of Material Misstatement)

ISA 315 is a standard that guides auditors in understanding a company's business and identifying potential risks where financial statements might be wrong. It involves gathering information about the company's environment, processes, and internal controls to pinpoint areas with higher risks of errors or fraud. This helps auditors plan their work effectively, focusing on the most relevant areas to ensure the financial statements are accurate and reliable. Essentially, ISA 315 ensures auditors thoroughly assess potential issues early on, so they can address them during their review.