Part I: Auditing and Assurance Standards · General Principles and Responsibilities SA - · Risk Assessment and Response to Assessed Risk SA -. Paper – 3: Cost Accounting and Financial Management · Paper – 4: Taxation Paper – 6: Auditing and Assurance · Paper – 7 Download Standards. Auditing and Assurance Standards. Share this (AAS 21) Consideration of Laws and Regulations in an Audit of Financial Statements Download Standards.
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Engagement and Quality Control Standards - Complete Text Revised Preface to the Standards on Quality Control, Auditing, Review, Other Assurance and. Auditing and Assurance Standards (AAS) - Auditor's Report on Financial Statements Statement on Standard Auditing Practices (SAP) 4 (Revised) - Auditor's. BoS Announcements · At a Glance: CA Course · e-Sahaayataa Know Rules & Regulations · Post-Qualification Courses Free Download - Publications.
Experienced Auditor: An Individual whether Internal or external to the firm who has practical audit experience and a reasonable understanding of audit processes, SA's and applicable legal and regulatory requirements, the business environment in which the entity operates and auditing and financial reporting issues relevant to the entity's industry. Form, Content and Extent in addition to the Nature and Purpose An auditor should prepare audit documentation sufficient to enable an experienced auditor having no previous connection with the audit to understand.
Nature, timing and extent of audit procedures: Identifying characteristics of specific items and matters tested. Who performed the audit and the date of completion. Who reviewed the report, the date and extent of review. Results of the audit procedures performed and evidence obtained: Document discussions of significant matters.
Nature of the significant matters - when and with whom discussed. Significant matters arising during the audit: Document how the inconsistencies have been addressed. In case of departure from the standard, the relevant requirements and the reason for departure, the alternative audit procedures performed to achieve the aim of that requirement. Matters arising after the date of the Auditor's Report If, in the exceptional circumstances, auditor performs new or additional audit procedures or draws new conclusions after the date of the auditor's report, the auditor shall document: Circumstances encountered Newer additional procedures performed, evidence obtained, conclusions reached and its effect on auditor's report.
When and by whom the resulting changes to audit documentation were made and reviewed.
Additional points Assembling of the final Audit file should be completed on a timely basis after the date of the auditor's report. After assembling the same, the auditor shall not delete or discard documentation of any nature before the end of its retention period. In case the auditor finds it necessary to modify existing or add new documentation post assembly, he should specify the reasons for them and when and by whom it was made and reviewed.
Application and Other Explanatory Material Timely preparation enhances quality, review, evaluation of the audit evidence and conclusions reached before finalisation of the auditor's report. Documentation prepared after audit work is less accurate than that prepared during audit. Form, content and extent depends on size and complexity of the entity, nature of procedures performed, risks, exceptions, audit methodology, tools used and professional judgment.
Audit documentation may be recorded on paper or on electronic or other media. Examples: Audit programmes, checklists, analysis, correspondence. Audit documentation should not include superseded drafts of working papers and financial statements, notes reflecting incomplete and preliminary thinking. Oral explanations can clarify or explain information contained in audit documentation. It is not necessary nor practicable for the auditor to document every matter considered or professional judgment made.
Judging the significance of a matter requires an objective analysis of the facts and circumstances. Summary describing significant matters identified during the audit and how they were addressed, or that includes cross-references to other relevant supporting audit documentation that provides such information.
The identifying characteristics should be recorded which helps serve a number of purposes. Documentation also includes records prepared by the entity's personnel. Retention period of audit engagements is no shorter than seven years from the date of the auditor's report.
Unless otherwise stated audit documentation is the property of the auditor. He may make disclosures but these should not affect his independence nor invalidate his work.
SA - Consideration of Laws and Regulations in an Audit of Financial Statements Scope:- This Standard on Auditing SA deals with the auditor's responsibility to consider laws and regulations while performing an audit of financial statements and not compliance with specific laws or regulations.
Non-compliance of the same shall attract fines, litigations or other consequences. Responsibility of Management: The management must ensure that entity's operations are conducted in accordance and with compliance of the various provisions of laws and regulations that determine the reported amounts and disclosures.
The management should:- Monitor legal requirements Institute and operate appropriate systems of internal controls Develop, publish and follow a code of conduct Ensure employees are properly trained Monitor compliance with code of conduct Engage legal advisors In larger companies the policies and procedures are assigned to: An Internal Audit function Compliance function.
Responsibility of the Auditor This SA is designed to assist the auditor in identifying material misstatement of the financial statements. He is responsible for obtaining a reasonable assurance that the financial statements as a whole are free from any material misstatement.
However, due to inherent limitations of audit there exists an unavoidable risk. Effective date: Audit of Financial Statements for period beginning on or after 1st April, Objectives:- The objectives of an auditor are:- To obtain sufficient audit evidence regarding compliance with provisions of laws and regulations, To perform audit procedures to help identify areas to non-compliance, To respond appropriately to non-compliance or suspected compliance, To maintain an attitude of professional skepticism.
Definition of Non-Compliance Acts of omission or commission by the entity either intentional or unintentional which are contrary in nature other than personal misconduct. Duties of Auditor Obtain knowledge about legal and regulatory framework Know how the entity is complying with the same Obtain Audit evidence w. Audit Procedures when Non-Compliance is identified or suspected Firstly understand the nature of act and circumstances and then evaluate the possible effects.
Then if there is any suspection, discuss the same with those charged with governance and if sufficient information is not obtain then the auditor can seek legal advice. SA - Communication with those charged with Governance The auditor shall communicate with those charged with governance and if there exist any audit committee or supervisory board, the auditor shall communicate the matter to them.
Reporting Non-Compliance in the Auditor's Report on Financial Statements The auditor shall express a qualified or adverse opinion on the financial statements in case of non-compliance.
If he is precluded from obtaining sufficient appropriate audit evidence, the auditor shall express a qualified opinion or disclaim an opinion. If he is unable to determine as to how exactly non-compliance has occurred, he shall evaluate the effect on auditor's opinion in accordance with proposed SA Reporting Non-Compliance to Regulatory and Enforcement Authorities The auditor has to determine whether he has the responsibility to report the identified or suspected non-compliance to parties outside the entity.
Documentation Copies of records or documents relating to identified or suspected non-compliance. Minutes of discussions with management and those charged with governance or parties outside the entity.
SA - Forming an Opinion and Reporting on Financial Statements Earlier known as 'The Auditor's Report on Financial Statements' Scope This SA deals with the auditor's responsibility to form an opinion on the financial statements and with the form and content of the auditor's report issued as a result of an audit of financial statements. It also promotes consistency in the auditor's report. Effective date For audits of financial statements for periods beginning on or after Objectives To form an opinion on the Financial Statements FS based on an evaluation of conclusion drawn from the audit evidence obtained.
To give a clear written report that describes the basis for the opinion. Requirements Prepared in all material respects and in accordance with the applicable financial reporting framework. To conclude that the Financial Statements are free from material misstatement, whether due to fraud or error after taking in to account: Obtaining sufficient appropriate audit evidence SA Uncorrected misstatement are not material, individually or in aggregate SA and Evaluation as to FS are prepared, in all material respects, in accordance with the requirements of the applicable financial reporting framework which is based on:- Consideration of the qualitative aspects of the entity's accounting practices, including indicators of possible bias in management's judgment.
Significant accounting policies are disclosed. Accounting policies are appropriate and consistent with applicable financial reporting framework. Estimates made are reasonable. Information is relevant, reliable, comparable and understandable.
Consider overall presentation, structure, contents and whether related notes represent the underlying transactions and events to achieve fair presentation. Financial statements adequately refer to or describe the applicable financial reporting framework.
The Council consist of 30 members of whom 32 are elected by the Members and remaining 8 are nominated by the Central Government to represent the Comptroller and Auditor General of India, Central Board of Direct Taxes, Department of Company Affairs and other stakeholders. The Secretariat of the Institute is headed by the Secretary who is in-charge of the office of the Institute as its Executive Head.
The activities of the Institute have been broadly divided into four parts comprising of Technical directorate, CPE Directorate, Board of studies and the Administration, each one headed by the separate head. It has also become a founder member of the International Innovation Network.
It has played a prominent role in the International Bodies through its nominees who have worked and are working on the governing Council as well as various Committees of those bodies. The ICAI is playing an increasingly proactive role in International Affairs and has drawn up a strategy with the aim of export of professional services in a big way to enable Indian Professionals to take the lead in International Affairs and come at par with those from the developed Countries The first step in this direction was the signing of a memorandum of understanding on April 26, with the newly formed Institute of Chartered Accountants of Nepal whereby the ICAI has provided technical and other support for the growth of the profession in Nepal.
The Institute has also entered into agreements with the Accounting bodies of Italy, Australia, China, Turkey, Israel, America, Canada for a reciprocal arrangement and technical support for the development of the professionals.
The Institute has also signed Memorandum of Understandings with the accounting bodies in Pakistan, Sri Lanka and Bangladesh for professional collaboration and cooperation. Functions of the institute The main functions of the Institute of the Chartered Accountants of India are prescribing qualifications for membership, holding examination and arranging practical training of candidates, enrollment of members, publication and maintenance of register of members qualified to practice the profession, carrying on activities for development of the profession and regulation and maintenance of status and standard of professional qualification of the members.
The Institute conducts examinations all over the country, provides postal coaching, oral coaching and arranges practical training, enabling students to qualify for the profession. It also organises seminars, workshops etc. It conducts research and brings out hand books and pamphlets on the subject of direct interest to the profession.
It explores the opportunities for employment of its members. In addition, it issues certificates of practice to its members and exercises disciplinary Jurisdiction as quasi-judicial authority over their profession and their conduct. The Institute coordinates with Universities on shaping their accountancy curriculum linked with the Chartered Accountancy course.
It also publishes a monthly journal titled "The Chartered Accountant". In addition to regulating the profession, the Institute is a national standard setting body in India and the National Accounting Standards are given statutory recognition under various statutes. The Indian Accounting standards have almost been harmonised with the International Accounting standards. The AASs are mandatory in nature.
Administration All statutory functions and many other important functions assigned to the Council by the Chartered Accountants Act, are administered by the Administration.
In addition, it takes active part in the activities relating to development of the profession. This directorate engages itself in the preparation of technical drafts for consideration of their respective committees.
Board of studies The functions of the Board of Studies are primarily to impart education to the students of the Chartered Accountancy Courses basically through distance education mode. The Board also takes care of the revision of syllabi of the various courses periodically. It also oversees the performances of various Accredited Institutions which has been authorized to impart oral coaching to students. The Continuing Professional Education Directorate of the Institute assumes the responsibility of updating the members on professional issues arising out of new legislation, technological changes and latest pronouncements of the Institute as well as other developments relevant to the profession.
This directorate also looks after the activities related to certain Post Qualification Courses viz. With effect from Jan , the CPE has been made mandatory for members in practice who will have to gain specified number of CPE credit annually by undergoing approved learning activities.
Some relaxation has been given to senior members.