Standards of Auditing - Introduction and Application in the Indian Context
Click here to load reader
-
Upload
bharath-rao -
Category
Business
-
view
498 -
download
2
Transcript of Standards of Auditing - Introduction and Application in the Indian Context
Standards of Auditing – Intro and ApplicationBharath Rao
Outline
Need for Uniformity
Regulation, Standards, Frameworks Benchmarking
Introduction to Standards to Auditing
SA 200, SA 210, SA 220, Sa 230, SA 250, SA 300, SA 320, SA 500, SA 501, SA 505, SA 510, SA 585, SA 700
Structure of a Standard of Audit Document
Why do we need the benchmark uniformity?
Investor Protection and
Fraud DetectionCompliance
Comparability Decision Making
Growth and Development
Increased Standard of
Living
Section 143(2) of the Companies Act 2013
The auditor shall make a report to the members of the company on the accounts examined by him and on every financial statements which are required by or under this Act to be laid before the company in general meeting and the report shall after taking into account the provisions of this Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of this Act or any rules made thereunder or under any order made under sub-section (11) and to the best of his information and knowledge, the said accounts, financial statements give a true and fair view of the state of the company’s affairs as at the end of its financial year and profit or loss and cash flow for the year and such other matters as may be prescribed.
Clause 9 of Professional Ethics
Fails to invite attention to any material departure from the generally accepted procedure of audit applicable to the circumstances
This clause implies that the audit should be performed in accordance with “generally accepted procedure of audit applicable to the circumstances” and if for any reason the auditor has not been able to perform the audit in accordance with such procedure, his report should draw attention to the material departures from such procedures. What constitutes “generally accepted audit procedure” would depend upon the facts and circumstances of each case, but guidance is available in general terms from the various pronouncements of the institute is issued by way of statements and guidance notes and SAs to the members.
Understanding a Standard
Regulation
• Mandatory to comply
• Companies Act, Income Tax Act
Standard
• Mandatory or Recommendatory
• ISO Standards, AS, SA
Framework
• Recommendatory
• COBIT, COSO
Introduction of Standards to Auditing
Auditing Standards issued by ICAI to its members and students
There are 37 Auditing Standards issued
Initially they were called as AAS i.e. Auditing and Assurance Standards
Revised in the year 2010 under the Clarity Project
Mandatory to be followed as per circumstance for every member of ICAI
Standards of Auditing Commonly Used
SA Name Application
200 Principles of Audit
21o Terms of Engagement Client procurement
220 Quality of service Every audit and work
230 Audit Documentation Workpapers
250 Regulation understanding
Regulation applicable to client
300 Audit Planning Planning
320 Sampling Test Check Basis
500 Audit Evidence Audit Evidence
501 Audit Evidence –Specifics
Inventories, Litigations,Valuation of Investments, Segment Reporting
505 External Confirmation Audit Evidence
510 Opening Balances Opening Balances, Policies, Opinion of previous auditor
585 Written Representations Closing Stock etc.
700 Audit report opinion For every audit
Structure of a SA document
Table of Contents
Introduction Scope
Effective Date
Objectives
Definitions
Requirements
Application and other explanatory material Para – Axx
Reference to Above always
Appendix
Thank You