Probe Audit | 02.40 - Evaluation Of Misstatements

Published: 28/09/2026

The following describes the functionality and features included in Probe Audit Premium+

Instructions:

Objective

The objective of this document is to reassess the materiality levels established during the planning stage and to evaluate the misstatements identified during the audit.

The following key concepts of the Probe Audit Premium+ Methodology are set in this document:

Reassessment of materiality based on final financial results (ISA 320)
Accumulation and evaluation of all identified misstatements - corrected and uncorrected (ISA 450)
Determination of whether uncorrected misstatements are material to the financial statements

Document placement

Document 02.40 – Evaluation of misstatements can be found in the Finalisation folder in the Caseware document manager.

Document content

This document is designed to be an evaluation document that allows the engagement team to reassess materiality and evaluate the misstatements identified during the audit. The document presents five materiality bases with their applicable minimum and maximum percentage parameters and current year values, the overall materiality and performance materiality amounts set during the planning stage, and a conclusion regarding misstatements.

The document addresses the requirements of ISA 450 – Evaluation of Misstatements Identified During the Audit and ISA 320 – Materiality in Planning and Performing an Audit. The following bookmarks are available in the document map to assist you in navigating the document:

● Materiality reassessment

● Evaluation of misstatements (SoCF)

● Qualitative disclosure

● Overall conclusion

The Evaluation of misstatements (SoCF), Qualitative disclosure and Overall conclusion sections are displayed in the document only once misstatements have been recorded in the engagement file. The Evaluation of misstatements (SoCF) section presents the statement of cash flows line items, grouped under operating, investing and financing activities (each available as a sub-bookmark in the document map), with the unaudited and audited balances, the corrected misstatements (normal and reclassifying) and the uncorrected misstatements (factual, projected and judgemental) per line item, together with a conclusion and annotation column. The Qualitative disclosure section records disclosure or presentation misstatements that are not quantified against a line item. The Overall conclusion section contains questions on the accumulation, evaluation and reporting of misstatements that the engagement team must answer.

Layout

Column	Input Required	Outcome
Materiality reassessment	No input is required in this column. Lists the five pre-populated materiality assessment bases: (a) Revenue, (b) Net profit before tax, (c) Shareholders' equity, (d) Total assets, and (e) Total liabilities, followed by the calculated overall materiality range (overall materiality may be set between the minimum and maximum amounts), the overall materiality set during the planning stage and the performance materiality set during the planning stage.	No impact on the engagement file. Identifies the line items of the materiality reassessment.
Min and Max	No input is required in these columns. Displays the minimum and maximum percentage parameters applicable to each materiality base.	No impact on the engagement file. Determines the range within which overall materiality may be set once a materiality base is selected.
Current year (e.g. 2023)	Displays the current year value for each materiality base and the overall materiality and performance materiality amounts set during the planning stage. Select the applicable materiality base by clicking the tick box next to the relevant base in this column. Only one base should be selected.	The overall materiality range and the overall final materiality are calculated based on the selected base and its minimum and maximum percentage parameters. The planning-stage amounts are presented for comparison during the reassessment.
Conclusion regarding materiality reassessment
Overall final materiality is therefore set as	No input is required in this column. Displays the calculated overall final materiality based on the selected materiality base and the percentage parameters.	Sets the final materiality amount for the engagement. The engagement team must confirm that the final materiality is appropriate.
Reason(s)	Enter the reason for the final materiality amount selected by the engagement team.	No impact on the engagement file. Documents the engagement team's rationale for the final materiality assessment.
Conclusion regarding misstatements
Conclusion	Where no misstatements have been recorded in the engagement file, a default statement ('No misstatements, neither corrected nor uncorrected, were found') is displayed. Where misstatements have been recorded, enter the values for each category of misstatement (corrected and uncorrected – factual, projected and judgemental) from the schedule of misstatements (02.43) and document the engagement team's overall conclusion.	No impact on the engagement file. Records the engagement team's conclusion on the corrected and uncorrected misstatements identified during the audit.
Evaluation of misstatements (SoCF)
Line item	No input is required in this column. Lists the statement of cash flows line items grouped under Cash flows from operating activities, Cash flows from investing activities and Cash flows from financing activities, each ending with the net cash total for the activity. The 'Adjustments for:' line item can be expanded by clicking the plus sign to display the individual adjustments.	No impact on the engagement file. Identifies the line item to which the misstatements relate. Line items with no balances or misstatements display zero values.
Balances – Unaudited and Audited	No input is required in these columns. Displays the unaudited balance and the audited balance for each line item from the engagement file.	No impact on the engagement file. Provides the balances against which the misstatements for the line item are evaluated.
Misstatements – Corrected: Normal, Reclassifying and Total	No input is required in these columns. Displays the corrected misstatements recorded in the engagement file for each line item, split between normal and reclassifying adjustments, and the total corrected misstatements.	No impact on the engagement file. Summarises the corrected misstatements per line item.
Misstatements – Uncorrected: Factual, Projected, Judgemental and Total	No input is required in these columns. Displays the uncorrected misstatements recorded in the engagement file for each line item, classified as factual, projected or judgemental, and the total uncorrected misstatements.	No impact on the engagement file. Summarises the uncorrected misstatements per line item for evaluation against the final materiality.
Warning indicator	No input is required in this column. A warning indicator is displayed next to a line item where the uncorrected misstatements require the engagement team's attention.	No impact on the engagement file. Draws attention to line items that must be considered in the conclusion.
Conclusion	Enter the engagement team's conclusion on the misstatements identified for the line item.	No impact on the engagement file. Documents the evaluation of the misstatements per line item.
Annotation	Click the plus icon to add an annotation to the line item.	No impact on the engagement file. Records additional commentary on the line item.
Qualitative disclosure
Description of disclosure or presentation misstatements	Enter a description of the disclosure or presentation misstatement identified. Click 'Add another line' to record a further misstatement.	No impact on the engagement file. Records the qualitative misstatements identified during the audit.
Note	Enter the reference to the note in the financial statements to which the misstatement relates.	No impact on the engagement file. Links the misstatement to the affected disclosure.
Balances – Unaudited and Audited	Enter the unaudited and audited balances of the disclosure to which the misstatement relates.	No impact on the engagement file. Provides the balances against which the misstatement is evaluated.
Misstatements – Uncorrected: Factual, Projected, Judgemental and Total	Enter the uncorrected misstatement amount in the factual, projected or judgemental column. The total is calculated.	No impact on the engagement file. Quantifies the uncorrected qualitative misstatements for evaluation against the final materiality.
Warning indicator, Comment and Annotation	A warning indicator is displayed where the misstatement requires the engagement team's attention. Enter any comment on the misstatement in the Comment column and click the plus icon to add an annotation.	No impact on the engagement file. Documents the engagement team's consideration of the misstatement.
Overall conclusion
Question	No input is required in this column. Displays the conclusion questions on the accumulation, evaluation and reporting of misstatements; question 10 has sub-questions (a) to (d). Guidance is available where a lightbulb icon is displayed next to a question.	No impact on the engagement file. Sets out the matters the engagement team must conclude on before finalising the evaluation of misstatements.
Yes / No	Select Yes or No from the drop-down list for each question.	A 'No' answer indicates a matter that the engagement team must address and document before concluding on the misstatements.
Prepared by	No manual input is required when 'Yes' is selected – the initials and date of the engagement team member are populated automatically. When 'No' is selected, click the sign-off button to populate the initials and date.	No impact on the engagement file. Records who concluded on each question and when.
Ref	Select the reference to the supporting working paper from the drop-down list.	No impact on the engagement file. Cross-references the conclusion to the supporting working paper.

Document outcomes

The engagement team must select the applicable materiality base, review the calculated overall final materiality, and document the reason for the final materiality amount. The engagement team must compare the final materiality to the overall materiality and performance materiality set during the planning stage to determine whether the reassessment is appropriate.

Where no misstatements have been recorded in the engagement file, the engagement team must review the default conclusion regarding misstatements. Where misstatements have been recorded, the engagement team must enter the values for each category of misstatement and document the overall conclusion.

Where misstatements have been recorded in the engagement file, the engagement team must evaluate the corrected and uncorrected misstatements per statement of cash flows line item and document a conclusion for each affected line item, record and evaluate any qualitative disclosure or presentation misstatements, and answer the overall conclusion questions. Any question answered 'No' must be addressed and documented before the evaluation of misstatements is concluded.

Group Audits

When the engagement type was selected as 'Group Audit Single' or 'Group Audit Multiple', the document follows the same layout as the single-entity version, with the following differences:

The sign-off block in the document header contains an additional 'Reviewed by' row for the second reviewer of the document.

The Materiality reassessment, Conclusion regarding materiality reassessment and Conclusion regarding misstatements sections are unchanged from the single-entity version.

The Qualitative disclosure and Overall conclusion sections are displayed in the group file even where no misstatements have been recorded in the engagement file.

The Overall conclusion questions refer to 'group management' (question 3) and 'those charged with governance of the group' (question 9).