Auditing
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Statement on Auditing Standards - SA 530
The auditing standards that apply when an auditor uses audit sampling in performing audit procedures. Audit sampling involves testing a subset of items within a population of audit relevance, with the goal of providing the auditor with a reasonable basis on which to draw conclusions about the entire population. The objective of audit sampling is to provide a reasonable basis for the auditor to draw conclusions about the population from which the sample is selected. To achieve this objective, the auditor must consider both sampling risk and non-sampling risk. Sampling risk is the risk that the auditor's conclusion based on a sample may be different from the conclusion if the entire population were subjected to the same audit procedure. Non-sampling risk is the risk that the auditor reaches an erroneous conclusion for any reason not related to sampling risk, such as using inappropriate audit procedures or misinterpreting audit evidence.
Statement on Auditing Standards - SA 501
The Scope of Auditing standards and its effective date. SA 501 deals with specific considerations by the auditor in obtaining sufficient appropriate audit evidence with respect to inventory, litigation and claims involving the entity, and segment information in an audit of financial statements. The SA 501 applies to audits of financial statements for periods beginning on or after April 1, 2010, and its objective is to enable the auditor to obtain sufficient appropriate audit evidence to evaluate the existence and condition of inventory, the completeness of litigation and claims involving the entity, and the presentation and disclosure of segment information in accordance with the applicable financial reporting framework. In SA 501 provides guidance to auditors on how to effectively and appropriately evaluate inventory, litigation and claims, and segment information in financial statements during an audit to obtain sufficient and appropriate audit evidence.
Statement on Auditing Standards - SA 500
The Auditing standards provides guidance to auditors on the concept of audit evidence and the procedures to obtain sufficient appropriate evidence to support the auditor's opinion on the financial statements. The objective of the auditor is to design and perform audit procedures that enable them to obtain evidence that is of sufficient quality and quantity to draw reasonable conclusions on which to base their opinion. The SA 500 applies to all audit evidence obtained during the audit, including evidence derived from the entity's accounting records and information obtained from other sources. However, specific SA 500 deal with different aspects of the audit, such as obtaining audit evidence related to specific topics, procedures to obtain evidence, and evaluation of the sufficiency and appropriateness of the evidence obtained.
Statement on Auditing Standards - SA 505
The Auditing standards that provides guidance to auditors on using external confirmation procedures to obtain relevant and reliable audit evidence. External confirmation procedures involve the auditor obtaining direct written responses from third parties (known as confirming parties) in paper form, electronic form, or another medium. The purpose of this SA 505 is to help auditors design and perform external confirmation procedures to obtain relevant and reliable audit evidence.
Statement on Auditing Standards - SRS 4400
The Standard on Related Services (SRS) provides guidance and standards for auditors when they undertake engagements to perform agreed-upon procedures regarding financial information. This means that the auditor is engaged by the client to perform certain procedures concerning specific financial data, such as accounts payable, accounts receivable, purchases from related parties, and sales and profits of a segment of an entity or a financial statement, such as a balance sheet or a complete set of financial statements. The auditor then issues a report of factual findings based on the specified procedures performed on the specified subject matter.
Statement on Auditing Standards - SAE 3400
A Standard on Assurance Engagement (SAE) that provides guidance for auditors who are engaged to examine and report on prospective financial information. This type of information is based on assumptions about future events and possible actions by an entity and can take the form of a forecast, projection, or combination of both.
Statement on Auditing Standards - SA 800
The auditing standards are a set of guidelines that auditors must follow when conducting an audit of financial statements. This SA 800 specifically deals with audits of financial statements that have been prepared using a special purpose financial reporting framework. A special purpose financial reporting framework is a framework that has been designed to meet the financial information needs of specific users. It may be a fair presentation framework, which means that it presents the financial statements fairly in accordance with the applicable financial reporting framework, or a compliance framework, which means that it meets the requirements of a specific set of regulations or contracts.
Statement on Auditing Standards - SA 705
The auditing standards that are being summarized here deals with the auditor's responsibility to issue an appropriate report when the auditor concludes that a modification to the auditor's opinion on the financial statements is necessary. In other words, this SA provides guidance on how an auditor should modify their report when they encounter significant issues or errors in the financial statements that require a modification to the opinion.
Statement on Auditing Standards - SA 220
The Standard on Auditing (SA) that provides guidance to auditors on quality control procedures for an audit of financial statements. The SA sets out the specific responsibilities of the auditor and engagement quality control reviewer in relation to quality control systems, policies, and procedures.
Statement on Auditing Standards-SA 402
The Auditing standards provide guidance on the auditor's responsibility to obtain sufficient appropriate audit evidence in these cases, by applying SA 315 and SA 330. SA 402 specifies that the services provided by a service organization are relevant to the audit of the user entity's financial statements if they affect certain aspects of the user entity's information system, including classes of transactions, procedures for initiating and processing transactions, accounting records, and controls around journal entries. The extent of work required by the auditor will depend on the significance of these services to the user entity.
Statement on Auditing Standards-SA 265
The scope and objective of the auditing standards related to the auditor's responsibility to communicate deficiencies in internal control to those charged with governance and management. The SA 265 applies when the auditor identifies deficiencies in internal control during the audit of financial statements. The auditor is required to obtain an understanding of internal control relevant to the audit when identifying and assessing the risks of material misstatement. However, the auditor is not required to express an opinion on the effectiveness of internal control.
Statement on Auditing Standards - SAE 3402
SAE 3402 - the standard on assurance engagements undertaken by professional accountants in public practice to provide a report on the controls at a service organization that provides a service likely to be relevant to user entities' internal control as it relates to financial reporting.
Statement on Auditing Standards - SA 300
This Auditing standard discusses the importance of planning an audit of financial statements and outlines the responsibilities of the auditor in this regard. The purpose of planning is to ensure that the audit is performed in an effective and efficient manner. Adequate planning can help the auditor to identify and resolve potential problems on a timely basis, devote appropriate attention to important areas of the audit, and properly organize and manage the audit engagement.
Statement on Auditing Standards-SA 315
The SA 315 is effective for audits of financial statements for periods beginning on or after April 1, 2008. The objective of the auditor is to identify and assess the risks of material misstatement, which can occur due to fraud or error, at the financial statement and assertion levels. To accomplish this objective, the auditor must have a comprehensive understanding of the entity and its environment, including its internal control. This understanding provides a basis for designing and implementing responses to the identified risks of material misstatement, which helps the auditor to reduce the risk of material misstatement to an acceptably low level.
Statement on Auditing Standards - SA 320
The concept of materiality in the context of an audit of financial statements. Materiality refers to the level at which a misstatement or omission in the financial statements could influence the economic decisions of users of those statements. The auditor's responsibility is to apply the concept of materiality appropriately in planning and performing the audit, and in evaluating the effect of identified misstatements on the audit and of uncorrected misstatements, if any, on the financial statements.
Statement on Auditing Standard – SA 230
SA 230 provides guidance to auditors on how to prepare audit documentation for an audit of financial statements. The purpose of audit documentation is to provide evidence that the audit was planned and performed in accordance with SAs and applicable legal and regulatory requirements, and to support the auditor's basis for their conclusions about the achievement of the overall objectives of the audit.
Statement on Auditing Standards - SA 560
The Auditing standards that deal with the auditor's responsibilities related to subsequent events in an audit of financial statements. Subsequent events are events that occur between the date of the financial statements and the date of the auditor's report that may require adjustments or disclosures in the financial statements. The SA 560 explains that financial statements may be affected by events that occur after the date of the financial statements. There are two types of subsequent events: those that provide evidence of conditions that existed at the date of the financial statements, and those that provide evidence of conditions that arose after the date of the financial statements. The SA 560 requires the auditor to obtain sufficient appropriate audit evidence about whether subsequent events that require adjustment or disclosure in the financial statements are appropriately reflected in those financial statements. The SA 560 also requires the auditor to respond appropriately to facts that become known to the auditor after the date of the auditor's report, which, if known at the time, may have caused the auditor to amend the auditor's report. The SA 560 defines several terms used in the standard, including the date of the financial statements, the date of approval of the financial statements, the date of the auditor's report, and the date the financial statements are issued. The date of the financial statements is the date at the end of the latest period covered by the financial statements. The date of approval of the financial statements is the date on which all the statements that comprise the financial statements, including the related notes, have been prepared and those with the recognized authority have asserted that they have taken responsibility for those financial statements. The auditor's report cannot be dated earlier than the date on which the auditor has obtained sufficient appropriate audit evidence on which to base the opinion on the financial statements. The date of the auditor's report cannot be earlier than the date of approval of the financial statements. The date the financial statements are issued depends on the regulatory environment of the entity. In some circumstances, the date the financial statements are issued may be the date that they are filed with a regulatory authority.
Statement on Auditing Standards - SRS 4410
SRS 4410 applies specifically to "compilation engagements," which are engagements where the practitioner helps management with financial information without providing any assurance on that information.
Statement on Auditing Standards - SA 610
The auditing standards explains that the standard applies to situations where the external auditor plans to use the work of internal auditors in obtaining audit evidence, or to use internal auditors to provide direct assistance under the direction, supervision, and review of the external auditor. The standard clarifies that if an entity does not have an internal audit function, then this standard does not apply. Similarly, the standard does not apply if the responsibilities and activities of the internal audit function are not relevant to the audit or if the external auditor does not expect to use the work of the function in obtaining audit evidence.
Statement on Auditing Standards - SA 710
The Auditing standards outline the auditor's responsibilities regarding comparative information in an audit of financial statements. Comparative information is essentially information that presents the financial results and position of an entity for one or more prior periods for comparison with the current period. The nature of the comparative information presented in an entity's financial statements depends on the requirements of the applicable financial reporting framework.
SA 810 - Statement on Auditing Standards
SA 810 is a standard that provides guidance to auditors when reporting on summary financial statements. Summary financial statements are a condensed version of an entity's financial statements and contain less detail, but still provide a structured representation of an entity's economic resources or obligations at a point in time or changes over a period.
Statement on Auditing Standards-SA 260
The Auditing standard that outlines the auditor's responsibility to communicate with those charged with governance during an audit of financial statements. The SA applies regardless of an entity's governance structure or size, but specific considerations apply for entities where all those charged with governance are involved in managing the entity, and for listed entities.
Statement on Auditing Standards - SA 701
The Auditing standards for communicating key audit matters in an auditor's report. The purpose of communicating key audit matters is to enhance transparency and provide additional information to users of financial statements about the most significant matters in the audit of the financial statements of the current period. The significance of a matter is judged by the auditor in the context of quantitative and qualitative factors, such as relative magnitude, nature, effect, and the expressed interests of intended users or recipients.
Statement on Auditing Standards - SA 510
The Auditing standards are a guideline that outlines the responsibilities of auditors when conducting an initial audit engagement. An initial audit engagement refers to an audit of financial statements that have not been audited before, or were audited by a different auditor in the prior period. The SA sets out the requirements for auditors to examine opening balances, which include financial statement amounts, contingencies, and commitments, that existed at the beginning of the period being audited.
Statement on Auditing Standards - SRE 2410
The purpose and scope of the Standard on Review Engagements (SRE) is which provides guidance on the auditor's responsibilities when reviewing an audit client's interim financial information. Interim financial information refers to financial statements prepared for a period that is shorter than the entity's financial year. The auditor should perform the review in accordance with the SRE 2410, which includes updating their understanding of the entity and its environment through inquiries made during the review process. If a practitioner who is not the auditor of the entity is engaged to perform a review of interim financial information, they should follow SRE 2400 instead. The SRE 2410 can also be applied to review historical financial information other than interim financial information.
Statement on Auditing Standard – SA 240
The SA 240 defines fraud as a deliberate action resulting in misstatements in financial statements. The standard distinguishes between two types of intentional misstatements relevant to the auditor: misstatements resulting from fraudulent financial reporting and misstatements resulting from misappropriation of assets.
Statement on Auditing Standards - SAE 3420
SAE 3420, the Standard on Assurance Engagements (SAE) which provides guidance to practitioners who are conducting reasonable assurance engagements to report on pro forma financial information that is included in a prospectus.
Statement on Auditing Standards - SA 330
The Auditing standards provides guidance to auditors on their responsibilities in designing and implementing responses to the risks of material misstatement identified in a financial statement audit. The effective date of this SA 330 is for audits of financial statements for periods beginning on or after April 1, 2008. The objective of the auditor is to obtain sufficient appropriate audit evidence about the assessed risks of material misstatement by designing and implementing appropriate responses to those risks.
Statement on Auditing Standard-SA 250
The Auditing standard applies to auditors who are responsible for performing an audit of financial statements, but it does not apply to other assurance engagements.
Statement on Auditing Standard - SA 620
The scope of auditing standards that deals with the auditor's responsibilities regarding the use of an individual or organization's work in a field of expertise other than accounting or auditing when that work is used to assist the auditor in obtaining sufficient appropriate audit evidence. The SA 620 makes it clear that it does not deal with situations where the engagement team includes a member with expertise in a specialized area of accounting or auditing (which is dealt with in SA 220) or the auditor's use of the work of an individual or organization possessing expertise in a field other than accounting or auditing, whose work in that field is used by the entity to prepare the financial statements (a management's expert), which is dealt with in SA 500.
Statement on Auditing Standards - SA 706
The auditing standards that deals with additional communication in the auditor's report when the auditor considers it necessary to draw users' attention to a matter that is of such importance that it is fundamental to users' understanding of the financial statements or any other matter that is relevant to users' understanding of the audit, the auditor's responsibilities, or the auditor's report. This SA 706 establishes requirements and provides guidance when the auditor determines key audit matters and communicates them in the auditor's report.
Statement on Auditing Statement - SRE 2400
The Scope of the Standard on Review Engagements (SRE) which outlines the responsibilities of a practitioner when performing a review of financial statements. The SRE 2400 outlines the practitioner's responsibilities when engaged to perform a review of historical financial statements, when the practitioner is not the auditor of the entity’s financial statements. The SRE also defines the form and content of the practitioner's report on the financial statements.
Statement on Auditing Standards - SA 570
The responsibilities of auditors in relation to the "going concern" basis of accounting, which is the assumption that a company will continue to operate for the foreseeable future. The first point made is that this Auditing standards deals with the auditor's responsibilities in the audit of financial statements relating to going concern and the implications for the auditor's report. The financial statements are typically prepared on the going concern basis of accounting, unless management intends to liquidate the entity or has no realistic alternative but to do so. If the going concern basis is appropriate, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.
Statement on Auditing Standard SA 210
The Accounting standards discusses a specific auditing standard, Standard on Auditing (SA) 210, which outlines the auditor's responsibilities when agreeing to the terms of an audit engagement with management and those charged with governance. An audit engagement is an agreement between an auditor and an entity (usually a company) to conduct an audit of the entity's financial statements.
Statement on Auditing Standards - SA 520
The Auditing standard being discussed in the auditors how use analytical procedures during financial statement audits. Analytical procedures refer to the evaluation of financial information by analysing plausible relationships between both financial and non-financial data. This type of analysis helps auditors to obtain relevant and reliable audit evidence when using substantive analytical procedures.
Standard on Quality Control
A standard on Quality Control (SQC) issued by the Auditing and Assurance Standards Board (AASB) for firms conducting audits, reviews of historical financial information, and other assurance and related services engagements. The SQC establishes standards and provides guidance on a firm’s responsibilities for its system of quality control.
Statement on Auditing Standards - SA 700
The responsibilities of auditors in forming an opinion on financial statements and issuing a report based on their audit. The SA 700 is applicable to audits of complete sets of general-purpose financial statements, which are financial statements prepared in accordance with a general-purpose framework designed to meet the common financial information needs of a wide range of users. The SA 700 aims to strike an appropriate balance between the need for consistency and comparability in auditor reporting globally and the need to increase the value of auditor reporting by making the information provided in the auditor’s report more relevant to users. It promotes consistency in the auditor’s report while also recognizing the need for flexibility to accommodate particular circumstances of individual jurisdictions.
Audit trail in software requirements
The audit trail notes that there is no similar reporting obligation for auditors globally, so there is no international guidance available to prescribe specific guidance for compliance.
Statement on Auditing Standards - SA 540
The auditing standards related to accounting estimates and fair value accounting estimates, and the responsibilities of auditors regarding them. SA 540 defines accounting estimates as financial statement items that cannot be measured precisely but can only be estimated. The nature and reliability of information available to management to support the making of an accounting estimate vary widely, which affects the degree of estimation uncertainty associated with accounting estimates. This estimation uncertainty affects the risks of material misstatement of accounting estimates, including their susceptibility to unintentional or intentional management bias. The further describes different examples of accounting estimates, including fair value accounting estimates and non-fair value accounting estimates, and discusses the degree of estimation uncertainty associated with each of them. For example, accounting estimates arising in entities that engage in business activities that are not complex, or accounting estimates derived from data that is readily available, may involve lower estimation uncertainty and lower risks of material misstatements. On the other hand, accounting estimates based on significant assumptions, such as those related to the outcome of litigation, may involve higher estimation uncertainty and higher risks of material misstatements SA 540 also highlights the responsibility of auditors to evaluate the management bias associated with accounting estimates. The financial reporting frameworks require neutrality, but the imprecise nature of accounting estimates can be influenced by management judgment, which may involve unintentional or intentional management bias. The auditor is responsible for assessing the risks of material misstatement associated with management bias and for designing audit procedures to address those risks Overall, SA 540 provides guidance and requirements on how auditors should approach accounting estimates and fair value accounting estimates, evaluate the risks of material misstatements associated with them, and address the management bias that may influence accounting estimates.
Statement on Auditing Standards - SA 580
The auditing standards that deal with the auditor's responsibility to obtain written representations from management and, where appropriate, those charged with governance. Written representations are statements provided by management to confirm certain matters or to support other audit evidence. While written representations are an important source of audit evidence, they do not provide sufficient appropriate audit evidence on their own, and the auditor must obtain other audit evidence to support the conclusions on which the audit opinion is based.
Statement on Auditing Standards-SA 299
Joint audits involve the appointment of two or more auditors who work together to issue an audit report on the financial statements of an entity.
Understanding Ind AS Accounting Standards 2023
Ind AS are the Indian version of International Financial Reporting Standards (IFRS). The standards were developed by the Ministry of Corporate Affairs (MCA) as a way to bring India’s financial reporting in line with global best practices. They are meant to provide more consistency, transparency, and accuracy when it comes to financial statements.
Statement on Auditing Standards - SA 720
The responsibilities of auditors regarding "other information" that is included in an entity's annual report, which refers to any financial or non-financial information (excluding financial statements and the auditor's report) presented in a single document or a combination of documents that serve the same purpose. The objectives of the auditor in relation to other information are to consider whether there is a material inconsistency between the other information and the financial statements, and whether there is a material inconsistency between the other information and the auditor's knowledge obtained in the audit. The auditor must respond appropriately when material inconsistencies appear to exist, or when the auditor becomes aware that other information appears to be materially misstated. The auditor must also report in accordance with the SA 720.
Statement on developmental and regulatory policies
The introduction of securities lending and borrowing in government securities, which refers to a process where investors temporarily transfer securities to another investor in exchange for a fee or collateral. This process can help to add depth and liquidity to the market by allowing investors to borrow securities that they need for short periods of time, which can aid in efficient price discovery.
Statement on Auditing Standards-SA 450
This auditing standard outlines the auditor's responsibility for evaluating the impact of misstatements on the financial statements during an audit. Misstatements can arise from errors or fraud, and the SA 450 provides examples of how misstatements can occur, such as inaccurate data gathering or processing, omission of amounts or disclosures, incorrect accounting estimates, and inappropriate accounting policies. The SA 450 defines misstatements as a difference between reported financial statement items and the amount, classification, presentation, or disclosure required by the applicable financial reporting framework. This means that if there is a discrepancy between what is reported in the financial statements and what should have been reported based on the applicable financial reporting framework, it is considered a misstatement. The SA 450 specifies that the auditor must evaluate the effect of identified misstatements on the audit and uncorrected misstatements on the financial statements. Uncorrected misstatements are misstatements that the auditor has accumulated during the audit and that have not been corrected. The auditor must also consider the impact of uncorrected misstatements on the financial statements when forming an opinion on the financial statements' overall accuracy. The SA 450 is effective for audits of financial statements for periods beginning on or after April 1, 2010. The objective of the auditor is to ensure that financial statements are free from material misstatements and that reasonable assurance has been obtained that the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.
Statement on Auditing Standards - SA 600
The purpose and scope of the Auditing standards related to the use of the work of other auditors by the principal auditor in auditing the financial information of an entity. The principal auditor is responsible for forming and expressing their opinion on the financial information, even when work is delegated to assistants or performed by other auditors or experts. However, they are entitled to rely on the work performed by others, as long as they exercise adequate skill and care and have no reason to believe otherwise. This Standard establishes standards for situations where the principal auditor uses the work of another auditor with respect to the financial information of one or more components included in the financial information of the entity.
SA 805 - Statement on Auditing Standards
SA 805 provides definitions for key terms used in the standard, such as "historical financial information," "financial statements," and "element of a financial statement."