Thank you for your response
Thank you for your response
Our representative will get in touch with you shortly.
This standard primarily sets the objectives of an Independent Auditor (IA) and conduct of the audit in accordance with the Standards on Auditing (SA)
Listed below is the scope of this standard:
1. Overall objectives of IA which are obliged to comply with
2. States an IA’s general responsibilities which should be adhered to in all audits
3. Determines the nature and scope of an audit necessary to achieve those responsibilities
The Standards issued by the Auditing and Assurance Standards Board, apply equally to all entities, irrespective of their form, size and nature.
Overall objectives of an IA with respect to audit of financial statements are as under:
Some of the important definitions are given below:
Applicable financial reporting framework
“The financial reporting framework adopted by management and, where appropriate, those charged with governance in the preparation and presentation of the financial statements that is acceptable in view of the nature of the entity and the objective of the financial statements, or that is required by law or regulation.”
Information used by IA based on which opinions are formed which includes data from financial statements and any other sources. For the purpose of SA, sufficiency of audit evidence is the measure of quantity and appropriateness is measured with the quality of the audit evidence.
“The risk that the procedures performed by an IA to reduce audit risk to an acceptably low level will not detect a misstatement that exists and that could be material, either individually or when aggregated with other misstatements”
The person(s) with executive responsibilities for the conduct of the entity’s day to day operations. Responsibilities of the management include preparation of financial statements within applicable financial reporting framework that are free from material misstatement. Management should provide the auditor with the following:
It is the difference between what is reported on the financial statements and what should have been reported as per the applicable financial reporting framework.
Risk of material misstatement
The risk that the financial statements are materially misstated prior to audit. This consists of two components – Inherent risk which is errors before consideration of any related controls and Control risk will not be prevented by the entity’s internal control.
This primary requirement of this SA is an IA has to obtain reasonable assurance that the financial statements are free from material misstatements whether due to fraud or error. Also to:
When planning and performing the audit, an IA should use all the objectives set out in the SA, having regard to the interrelationships among various SAs, to:
IA to comply with all the requirements of an SA unless:
Exception to the above clause:
IA can depart from complying with certain requirements of SA based on judgment but has to perform alternative audit procedures to achieve the aim of that requirement. IA can restrain from the compliance only when specific audit procedure which even when performed are ineffective for that audit.
If an objective in a relevant SA cannot be achieved and it in turn affects the overall objective of an IA, then SA requires IA’s opinion to be modified or withdraw from the engagement. Failure to achieve an objective represents a significant matter and requires to be documented as per SA 230.
This SA is effective for audits of financial statements for periods beginning on or after April 1, 2010.