This document summarizes the auditor's responsibilities regarding opening balances when conducting an initial audit engagement. The auditor must (1) read the most recent financial statements and predecessor auditor's report, (2) obtain sufficient evidence that opening balances do not contain misstatements that materially affect the current period, and (3) determine if appropriate accounting policies were consistently applied or any changes properly accounted for. The auditor evaluates whether prior period closing balances were correctly brought forward, prior period items properly disclosed, and opening balances reflect appropriate policies.
ISQC 1 (Revised) Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and other Assurance and Related Services Engagements
The Auditors Responsibilities Relating to Fraud in an Audit of Financial Stat...Dr. Soheli Ghose Banerjee
This presentation is an overview of SA 240 (R). Prepared with Prof. S. Sircar.
Dr. Soheli Ghose ( Ph.D (University of Calcutta), M.Phil, M.Com, M.B.A., NET (JRF), B. Ed).
Assistant Professor, Department of Commerce,St. Xavier's College, Kolkata.
Guest Faculty, M.B.A. Finance, University of Calcutta, Kolkata
ISA 250 (Revised) Section B – The Auditor’s Statutory Right and Duty to Report to Regulators of Public Interest Entities and Regulators of Other Entities in the Financial Sector
This is presentation on Auditing by my friend Rohin Nadaf which was presented during ITT training of Institute of Chartered Accountants of India (ICAI)
This is a theoretical presentation describes the history of audit and assurance, definition, process of auditing, objectives, responsibilities, expectation gap, audit evidence and how to report the audit paper. This is mainly the vast knowledge about how an auditor performs audit and how the reporting of audit is done.
INTERNATIONAL STANDARD ON AUDITING 200 (REVISED)
OVERALL OBJECTIVES OF THE INDEPENDENT AUDITOR AND THE
CONDUCT OF AN AUDIT IN ACCORDANCE WITH INTERNATIONAL
STANDARDS ON AUDITING
ISQC 1 (Revised) Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and other Assurance and Related Services Engagements
The Auditors Responsibilities Relating to Fraud in an Audit of Financial Stat...Dr. Soheli Ghose Banerjee
This presentation is an overview of SA 240 (R). Prepared with Prof. S. Sircar.
Dr. Soheli Ghose ( Ph.D (University of Calcutta), M.Phil, M.Com, M.B.A., NET (JRF), B. Ed).
Assistant Professor, Department of Commerce,St. Xavier's College, Kolkata.
Guest Faculty, M.B.A. Finance, University of Calcutta, Kolkata
ISA 250 (Revised) Section B – The Auditor’s Statutory Right and Duty to Report to Regulators of Public Interest Entities and Regulators of Other Entities in the Financial Sector
This is presentation on Auditing by my friend Rohin Nadaf which was presented during ITT training of Institute of Chartered Accountants of India (ICAI)
This is a theoretical presentation describes the history of audit and assurance, definition, process of auditing, objectives, responsibilities, expectation gap, audit evidence and how to report the audit paper. This is mainly the vast knowledge about how an auditor performs audit and how the reporting of audit is done.
INTERNATIONAL STANDARD ON AUDITING 200 (REVISED)
OVERALL OBJECTIVES OF THE INDEPENDENT AUDITOR AND THE
CONDUCT OF AN AUDIT IN ACCORDANCE WITH INTERNATIONAL
STANDARDS ON AUDITING
Audit of Internal Financial Control over Financial Reporting (IFCR) A complet...Taufir Alam
Introduction to the Presentation on internal financial control over financial reporting_a complete guide
The Companies Act, 2013 has introduced some new requirements relating to audits and reporting by the statutory auditors of companies.
One of these requirements is given under Section 143(3)(i) of the Act which requires the statutory auditor to state in his audit report whether the company has adequate internal financial controls system in place and the operating effectiveness of such controls.
The section has cast onerous responsibilities on the statutory auditors because reporting on internal financial controls is not covered under the Standards on Auditing issued by the ICAI.
Since the concept of reporting on internal financial controls is still new in India this new reporting requirement has thrown up many challenges for the members.
To help the members properly understand and perform the various aspects of this reporting responsibility, the Auditing and Assurance Standards Board of the Institute of Chartered Accountants of India has brought out this Guidance Note on Audit of Internal Financial Controls Over Financial Reporting.
The Guidance Note covers aspects such as Scope of reporting on internal financial controls under Companies Act 2013, essential components of internal controls, Technical guidance on the audit of Internal Financial Controls, Implementation guidance on the audit of Internal Financial Controls.
I have presented the above guidance note into a presentation that will have a complete guide for those who are planning to go for Audit of Internal financial control over financial reporting. this presentation will cover all the relevant aspects and also provide the standard operation process for the efficient conduct of the IFCR Audit. You don't need to read the complete Guidance note.
International Staandards on Auditing 200FarhanNasir21
Overall Objectives ISA 200: To obtain reasonable assurance on the financial statements. To report on the financial statements, and communicate as required by the ISAs, in accordance with the auditor's findings
THERE ARE SO MANY STANDARDS OF AUDITING, HERE IN THIS PDF, I HAVE EXPLAINED ANY 10 STANDARDS ON AUDITING WITH FLOWCHARTS, PICTURES FOR BETTER REFERENCE OF THE TOPIC
Overall Objectives of the Independent Auditor and the Conduct of an Audit in ...Dr. Soheli Ghose Banerjee
This presentation is an overview of SA 200 (R).
Prepared with Prof. S. Sircar.
Dr. Soheli Ghose ( Ph.D (University of Calcutta), M.Phil, M.Com, M.B.A., NET (JRF), B. Ed).
Assistant Professor, Department of Commerce,St. Xavier's College, Kolkata.
Guest Faculty, M.B.A. Finance, University of Calcutta, Kolkata
Biological screening of herbal drugs: Introduction and Need for
Phyto-Pharmacological Screening, New Strategies for evaluating
Natural Products, In vitro evaluation techniques for Antioxidants, Antimicrobial and Anticancer drugs. In vivo evaluation techniques
for Anti-inflammatory, Antiulcer, Anticancer, Wound healing, Antidiabetic, Hepatoprotective, Cardio protective, Diuretics and
Antifertility, Toxicity studies as per OECD guidelines
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
unwillingness to rectify this violation through action requires accountability.
Postsecondary education is a unique opportunity for students to learn and have their ideas and beliefs challenged. However, universities receiving hundreds of millions of federal funds annually have denied
students that opportunity and have been hijacked to become venues for the promotion of terrorism, antisemitic harassment and intimidation, unlawful encampments, and in some cases, assaults and riots.
The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
• The Committee on Ways and Means has been investigating several universities since November 15, 2023, when the Committee held a hearing entitled From Ivory Towers to Dark Corners: Investigating the Nexus Between Antisemitism, Tax-Exempt Universities, and Terror Financing. The Committee followed the hearing with letters to those institutions on January 10, 202
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
Honest Reviews of Tim Han LMA Course Program.pptxtimhan337
Personal development courses are widely available today, with each one promising life-changing outcomes. Tim Han’s Life Mastery Achievers (LMA) Course has drawn a lot of interest. In addition to offering my frank assessment of Success Insider’s LMA Course, this piece examines the course’s effects via a variety of Tim Han LMA course reviews and Success Insider comments.
A Strategic Approach: GenAI in EducationPeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Operation “Blue Star” is the only event in the history of Independent India where the state went into war with its own people. Even after about 40 years it is not clear if it was culmination of states anger over people of the region, a political game of power or start of dictatorial chapter in the democratic setup.
The people of Punjab felt alienated from main stream due to denial of their just demands during a long democratic struggle since independence. As it happen all over the word, it led to militant struggle with great loss of lives of military, police and civilian personnel. Killing of Indira Gandhi and massacre of innocent Sikhs in Delhi and other India cities was also associated with this movement.
The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
The empire's roots lie in the city of Rome, founded, according to legend, by Romulus in 753 BCE. Over centuries, Rome evolved from a small settlement to a formidable republic, characterized by a complex political system with elected officials and checks on power. However, internal strife, class conflicts, and military ambitions paved the way for the end of the Republic. Julius Caesar’s dictatorship and subsequent assassination in 44 BCE created a power vacuum, leading to a civil war. Octavian, later Augustus, emerged victorious, heralding the Roman Empire’s birth.
Under Augustus, the empire experienced the Pax Romana, a 200-year period of relative peace and stability. Augustus reformed the military, established efficient administrative systems, and initiated grand construction projects. The empire's borders expanded, encompassing territories from Britain to Egypt and from Spain to the Euphrates. Roman legions, renowned for their discipline and engineering prowess, secured and maintained these vast territories, building roads, fortifications, and cities that facilitated control and integration.
The Roman Empire’s society was hierarchical, with a rigid class system. At the top were the patricians, wealthy elites who held significant political power. Below them were the plebeians, free citizens with limited political influence, and the vast numbers of slaves who formed the backbone of the economy. The family unit was central, governed by the paterfamilias, the male head who held absolute authority.
Culturally, the Romans were eclectic, absorbing and adapting elements from the civilizations they encountered, particularly the Greeks. Roman art, literature, and philosophy reflected this synthesis, creating a rich cultural tapestry. Latin, the Roman language, became the lingua franca of the Western world, influencing numerous modern languages.
Roman architecture and engineering achievements were monumental. They perfected the arch, vault, and dome, constructing enduring structures like the Colosseum, Pantheon, and aqueducts. These engineering marvels not only showcased Roman ingenuity but also served practical purposes, from public entertainment to water supply.
4. Page 4 of 17
540 18 Auditing Accounting Estimates, including Fair
Value Accounting Estimates, and Related
Disclosures
550 23 Related Parties
560 19 Subsequent Events
570 16 Going Concern
580 11 Written Representations
600 10 Special Consideraons ― A udi ts o f G r oup
Financial Statements (Including the Work of
Component Auditors) [1.4.2002]
610 7 Using the Work of Internal Auditors
620 9 Using the Work of an Auditor’s Expert
700 28 Forming an Opinion and Reporting on Financial
Statements
705 25 Modifications to the Opinion in the
Independent Auditor’s Report
706 Emphasis of Matter Paragraphs and Other
Matter Paragraphs in the Independent Auditor’s
Report
710 Comparative Information – Corresponding
Figures and Comparative Financial Statements
720 The Auditor’s Responsibility in Relation to Other
Information in Documents Containing Audited
Financial Statements
*Effective date means that the SA is effective for audits of the financial statements for periods beginning on
or after the specified date
. All rights reserved. These notes are for personal use only. Copying or transmitting, selling or profiting in any
other manner from these notes is prohibited.
5. SA200 – Overall objectives and Conduct of
an Audit
Page 5 of 17
1. This SA establishes the independent auditor’s overall responsibilities when conducting an audit of
financial statements in accordance with other SAs.
2. The purpose of an audit is to enhance the degree of confidence of intended users in the financial
statements.
3. This is achieved by the expression of an opinion by the auditor on whether the financial statements are
prepared, in all material respects, in accordance with an applicable financial reporting framework.
4. Auditor’s opinion does not assure, for example, the future viability of the entity nor the efficiency or
effectiveness with which management has conducted the affairs of the entity.
5. Laws and regulations may require auditors to provide opinions on other specific matters, such as the
effectiveness of internal control, or the consistency of a separate management report with the financial
statements.
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.
Financial reporting frameworks can be:-
(a) Fair presentation frameworks; or SA210
(b) Compliance frameworks SA800
An audit in accordance with SAs is conducted on the premise that management and, where appropriate,
those charged with governance have responsibilities that are fundamental to the conduct of the audit.
The audit of the financial statements does not relieve management or those charged with governance of
those responsibilities.
Management and those charged with governance have responsibility:-
(a) For the preparation and presentation of the financial statements in accordance with the
applicable financial reporting framework.
(b) For design, implementation and maintenance of internal control relevant to the preparation and
presentation of financial statements that are free from material misstatement, whether due to
fraud or error.
(c) To provide auditor with information and explanations
The financial statements prepared may be:-
(a) general purpose financial statements
(b) special purpose financial statements
. All rights reserved. These notes are for personal use only. Copying or transmitting, selling or profiting in any
other manner from these notes is prohibited.
6. SA240 – Fraud and Errors
Page 6 of 17
An intentional act by one or more individuals among management, those charged with
governance, employees, or third parties, involving the use of deception to obtain an unjust or illegal
advantage.
- Events or conditions that indicate an incentive or pressure to commit fraud or
provide an opportunity to commit fraud.
Although fraud is a broad legal concept, for the purposes of the SAs, the auditor is concerned with fraud
that causes a material misstatement in the financial statements.
Two types of intentional misstatements are relevant to the auditor –
(i) Misstatements resulting from fraudulent financial reporting; and
(ii) Misstatements resulting from misappropriation of assets
The primary responsibility for the prevention and detection of fraud rests with both;-
(i) those charged with governance of the entity and
(ii) Management.
This involves a commitment to creating a culture of honesty and ethical behavior which can be
reinforced by an active oversight by those charged with governance
An auditor conducting an audit in accordance with SAs is responsible for obtaining reasonable assurance
that the financial statements taken as a whole are free from material misstatement, whether caused by
fraud or error.
SA200 -Due to , there is an unavoidable risk that some material
misstatements of the financial statements will not be detected, even though the audit is properly
planned and performed in accordance with the SAs.
The risk of not detecting a material misstatement resulting from fraud is higher than the risk of not
detecting one resulting from error.
The risk of the auditor not detecting a material misstatement resulting from management fraud is
greater than for employee fraud, because management is frequently in a position to directly or indirectly
manipulate accounting records, present fraudulent financial information or override control procedures
designed to prevent similar frauds by other employees.
When obtaining reasonable assurance, the auditor is responsible for
throughout the audit, considering the potential for management override of
controls and recognizing the fact that audit procedures that are effective for detecting error may not be
effective in detecting fraud.
(a) To identify and assess the risks of material misstatement in the financial statements due to fraud;
. All rights reserved. These notes are for personal use only. Copying or transmitting, selling or profiting in any
other manner from these notes is prohibited.
7. Page 7 of 17
(b) To obtain sufficient appropriate audit evidence about the assessed risks of material misstatement due to
fraud, through designing and implementing appropriate responses; and
(c) To respond appropriately to identified or suspected fraud.
The auditor shall maintain an attitude of professional skepticism throughout the audit, recognizing the
possibility that a material misstatement due to fraud could exist, the auditor’s past
experience of the honesty and integrity of the entity’s management and those charged with governance.
Unless the auditor has reason to believe the contrary, the auditor may accept records and documents as
genuine.
Where responses to inquiries of management or those charged with governance are inconsistent, the
auditor shall investigate the inconsistencies.
SA 315 – Auditor should conduct a discussion among the engagement team members and a
determination by the engagement partner of matters which are to be communicated to those team
members not involved in the discussion.
The discussion shall place particular emphasis on how and where the entity’s financial statements may
be susceptible to material misstatement due to fraud, including how fraud might occur.
The discussion shall occur notwithstanding the engagement team members’ beliefs that management
and those charged with governance are honest and have integrity.
The auditor shall make inquiries of management regarding:
(a) Management’s assessment of the risk of material misstatements including the nature, extent and
frequency of such assessments
(b) Management’s process for identifying and responding to such risks
(c) Management’s communication to those charged with governance and to its employees regarding its
views on business practices and ethical behavior.
The auditor shall make inquiries of management and others within the entity including Internal Audit to
determine whether they have knowledge of any actual, suspected or alleged fraud affecting the entity.
The auditor shall obtain an understanding of how those charged with governance exercise oversight of
management’s processes for identifying and responding to the risks of fraud in the entity and the
internal control that management has established to mitigate these risks.
The auditor shall make inquiries to determine whether they have knowledge of any actual, suspected or
alleged fraud affecting the entity.
. All rights reserved. These notes are for personal use only. Copying or transmitting, selling or profiting in any
other manner from these notes is prohibited.
8. SA265 – Deficiencies in Internal Control
Page 8 of 17
This SA deals with the auditor’s responsibility to communicate appropriately to those charged with
governance and management deficiencies in internal control that the auditor has identified in an 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.
The objective of the auditor is to communicate appropriately to those charged with governance and
management deficiencies in internal control that the auditor has indentified during the audit and that, in
the auditor’s professional judgment, are of sufficient importance to merit their respective attentions.
- This exists when:
(i) A control is designed, implemented or operated in such a way that it is unable to prevent, or detect
and correct, misstatements in the financial statements on a timely basis; or
(ii) A control necessary to prevent, or detect and correct, misstatements in the financial statements on a
timely basis is missing.
- A deficiency or combination of deficiencies in internal control
that, in the auditor’s professional judgment, is of sufficient importance to merit the attention of those
charged with governance.
The auditor shall determine whether, on the basis of the audit work performed, the auditor has
identified one or more deficiencies in internal control.
If auditor has identified one or more deficiencies in internal control, the auditor shall determine, on the
basis of the audit work performed, whether, individually or in combination, they constitute significant
deficiencies.
The auditor shall communicate in writing significant deficiencies in internal control identified during the
audit to those charged with governance on a timely basis.
The auditor shall also communicate to management at an appropriate level of responsibility on a timely
basis.
The auditor shall include in the written communication of significant deficiencies in internal control:
(a) A description of the deficiencies and an explanation of their potential effects; and
(b) Sufficient information to enable those charged with governance and management to understand the
context of the communication.
In particular, the auditor shall explain that:
SA450 – Misstatements Identified
(i) The purpose of the audit was for the auditor to express an opinion on the financial statements;
(ii) The audit included consideration of internal control relevant to the preparation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion of the effectiveness of internal control; and
. All rights reserved. These notes are for personal use only. Copying or transmitting, selling or profiting in any
other manner from these notes is prohibited.
9. Page 9 of 17
This SA deals with the auditor’s responsibility to evaluate the effect of identified misstatements on the
audit and of uncorrected misstatements, if any, on the financial statements.
The objective of the auditor is to evaluate:
(a) The effect of identified misstatements on the audit; and
(b) The effect of uncorrected misstatements, if any, on the financial statements.
A difference between the amount, classification, presentation, or disclosure of a
reported financial statement item and the amount, classification, presentation, or disclosure that is
required for the item to be in accordance with the applicable financial reporting framework.
Misstatements can arise from error or fraud. When the auditor expresses an opinion on whether the
financial statements give a true and fair view or are presented fairly, in all material respects,
misstatements also include those adjustments of amounts, classification, presentation, or disclosure
that, in the auditor’s judgment, are necessary for the financial statements to give a true and fair view or
present fairly, in all material respects.
- Misstatements that the auditor has accumulated during the audit and that
have not been corrected.
The auditor shall accumulate misstatements identified during the audit, other than those that are clearly
trivial.
The auditor shall determine whether the overall audit strategy and audit plan need to be revised if :-
(a) The nature of identified misstatements and the circumstances of their occurrence indicate that
other misstatements may exist that, when aggregated with misstatements accumulated during the
audit, could be material; or
(b) The aggregate of misstatements accumulated during the audit approaches materiality determined in
accordance with SA 320.
At the auditor’s request, if management has examined a class of transactions, account balance or
disclosure and corrected misstatements that were detected, the auditor shall perform additional audit
procedures to determine whether misstatements remain.
The auditor shall communicate on a timely basis all misstatements accumulated during the audit with
the appropriate level of management, unless prohibited by law or regulation. The auditor shall request
management to correct those misstatements.
If management refuses to correct some or all of the misstatements communicated by the auditor, the
auditor shall obtain an understanding of management’s reasons for not making the corrections and shall
take that understanding into account when evaluating whether the financial statements as a whole are
free from material misstatement.
The auditor shall determine whether uncorrected misstatements are material, individually or in
aggregate. In making this determination, the auditor shall consider :-
. All rights reserved. These notes are for personal use only. Copying or transmitting, selling or profiting in any
other manner from these notes is prohibited.
10. Page 10 of 17
(a) The size and nature of the misstatements, both in relation to particular classes of transactions,
account balances or disclosures and the financial statements as a whole, and the particular
circumstances of their occurrence; and
(b) The effect of uncorrected misstatements related to prior periods on the relevant classes of
transactions, account balances or disclosures, and the financial statements as a whole.
The auditor shall communicate with those charged with governance uncorrected misstatements and the
effect that they, individually or in aggregate, may have on the opinion in the auditor’s report, unless
prohibited by law regulation. The auditor’s communication shall identify material uncorrected
misstatements individually. The auditor shall request that uncorrected misstatements be corrected.
The auditor shall request a written representation from management and, where appropriate, those charged
with governance whether they believe the effects of uncorrected misstatements are immaterial, individually
and in aggregate, to the financial statements as a whole. A summary of such items shall be included in or
attached to the written representation.
The audit documentation shall include:-
(a) The amount below which misstatements would be regarded as clearly trivial;
(b) All misstatements accumulated during the audit and whether they have been corrected; and
(c) The auditor’s conclusion as to whether uncorrected misstatements are material, individually or in
aggregate and the basis for that conclusion.
. All rights reserved. These notes are for personal use only. Copying or transmitting, selling or profiting in any
other manner from these notes is prohibited.
11. SA510 – Opening Balances
Page 11 of 17
This SA deals with the auditor’s responsibilities relating to opening balances when conducting an initial
audit engagement. In addition to financial statement amounts, opening balances include matters
requiring disclosure that existed at the beginning of the period, such as contingencies and commitments.
In conducting an initial audit engagement, the objective of the auditor with respect to opening balances
is to obtain sufficient appropriate audit evidence about whether:
(a) Opening balances contain misstatements that materially affect the current period’s financial
statements; and
(b) Appropriate accounting policies reflected in the opening balances have been consistently applied in
the current period’s financial statements, or changes thereto are properly accounted for and
adequately presented and disclosed in accordance with the applicable financial reporting
framework.
- An engagement in which either;
(i) the financial statements for the period were not audited or
(ii) the financial statements for the prior period were audited by a predecessor auditor.
-Those account balances that exist at the beginning of the period. Opening balances
are based upon the closing balances of the prior period and reflect the effects of transactions and events
of prior periods and accounting policies applied in the prior period. Opening balances also include
matters requiring disclosure that existed at the beginning of the period, such as contingencies and
commitments.
- The auditor from a different audit firm, who audited the financial statements of an
entity in the prior period and who has been replaced by the current auditor.
The auditor shall read the most recent financial statements, if any, and the predecessor auditor’s report
thereon, if any, for information relevant to opening balances, including disclosures.
The auditor shall obtain sufficient appropriate audit evidence about whether the opening balances
contain misstatements that materially affect the current period’s financial statements by:-
(a) Determining whether the prior period’s closing balances have been correctly brought forward to the
current period or, when appropriate, any adjustments have been disclosed as prior period items in
the current items in the current year’s statement of profit and loss; and
(b) Determining whether the opening balances reflect the application of appropriate accounting
policies.
(c) Where the prior year financial statements were audited, perusing the copies of the audited financial
statements including the other relevant documents relating to the prior period financial statements;
(d) Evaluating whether audit procedures performed in the current period provide evidence relevant to
the opening balances; or
(e) Performing specific audit procedures to obtain evidence regarding the opening balances.
. All rights reserved. These notes are for personal use only. Copying or transmitting, selling or profiting in any
other manner from these notes is prohibited.
12. Page 12 of 17
If the auditor obtains audit evidence that the opening balances contain misstatements that could
materially affect the current period’s financial statements, the auditor shall perform such additional
audit procedures as are appropriate in the circumstances to determine the effect on the current period’s
financial statements. If the auditor concludes that such misstatements exist in the current period’s
financial statements, the auditor shall communicate the misstatements with the appropriate level of
management and those charged with governance in accordance with SA 450.
The auditor shall obtain sufficient appropriate audit evidence about whether the accounting policies
reflected in the opening balances have been consistently applied in the current period’s financial
statements, and whether changes in the accounting policies have been properly accounted for and
adequately presented and disclosed in accordance with the applicable financial reporting framework
If the prior period’s financial statements were audited by a predecessor auditor and there was a
modification to the opinion, the auditor shall evaluate the effect of the matter giving rise to the modification
in assessing the risks of material misstatement in the current period’s financial statements.
If the auditor is unable to obtain sufficient appropriate audit evidence regarding the opening balances,
the auditor shall express a qualified opinion or a disclaimer of opinion, as appropriate.
If the auditor concludes that the opening balances contain a misstatement that materially affects the
current period’s financial statements, and the effect of the misstatement is not properly accounted for
or not adequately presented or disclosed, the auditor shall express a qualified opinion or an adverse
opinion, as appropriate.
If the auditor concludes that :-
(a) The current period’s accounting policies are not consistently applied in relation to opening balances
in accordance with the applicable financial reporting framework; or
(b) A change in accounting policies is not properly accounted for or not adequately presented or
disclosed in accordance with the applicable financial reporting framework,
the auditor shall express a qualified opinion or an adverse opinion as appropriate.
If the predecessor auditor’s opinion regarding the prior period’s financial statements included a modification
to the auditor’s opinion that remains relevant and material to the current period’s financial statements, the
auditor shall modify the auditor’s opinion on the current period’s financial statements in accordance with
SA705 and SA710.
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13. SA610 – Using work of an Internal Auditor
Page 13 of 17
The purpose of this SA is to provide guidance as to the procedures which should be applied by the
external auditor in assessing the work of the internal auditor for the purpose of placing reliance upon
that work.
The external auditor shall determine :-
(a) Whether the work of the internal auditors is likely to be adequate for purposes of the audit; and
(b) If so, the planned effect of the work of the internal auditors on the nature, timing or extent of
the external auditor’s procedures.
– An appraisal activity established or provided as a service to the entity. Its
functions include, amongst other things, examining, evaluating and monitoring the adequacy and
effectiveness of internal control.
Those individuals who perform the activities of the internal audit function. Internal
auditors may belong to an internal audit department or equivalent function.
1. Review of accounting system and related internal controls
2. Examination for management of financial and operating information
3. Examination of the economy, efficiency and effectiveness of operations including non-financial controls
of an organization
4. Physical examination and verification of assets
Though the objectives and approach of an external audit differ from that of an internal audit, some of
the means of achieving their respective objectives are often similar and, thus, much of the work of the
internal auditor may be useful to the external auditor in determining the nature, timing and extent of his
procedures.
The external auditor should, as part of his audit, evaluate the internal audit function to the extent he
considers that it will be relevant in determining the nature, timing and extent of his compliance and
substantive procedures. Depending upon such evaluation, the external auditor may be able to adopt less
extensive procedures than would otherwise be required.
By its very nature, the internal audit function cannot be expected to have the same degree of
independence as is essential when the external auditor expresses his opinion on the financial
information.
The report of the external auditor is his sole responsibility, and that responsibility is not by any means
reduced because of the reliance he places on the internal auditor’s work.
The external auditor should evaluate the internal audit function and document his conclusions in this
respect.
The important aspects to be considered in this context are:
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14. Page 14 of 17
(a) Organizational Status
(b) Scope of Function
(c) Technical competence
(d) Due Professional Care
In determining whether the work of the internal auditors is likely to be adequate for purposes of the
audit, the external auditor shall evaluate :-
(a) The objectivity of the internal audit function;
(b) The technical competence of the internal auditors;
(c) Whether the work of the internal auditors is likely to be carried out with due professional care;
(d) Whether there is likely to be effective communication between the internal auditors and the
external auditor.
(e) The nature and scope of specific work performed, or to be performed, by the internal auditors.
(f) The assessed risks of material misstatement at the assertion level for particular classes of
transactions, account balances, and disclosures;
(g) The degree of subjectivity involved in the evaluation of the audit evidence gathered by the internal
auditors in support of the relevant assertions.
(h) The work performed by internal auditors having adequate technical training and proficiency;
(i) The work properly supervised, reviewed and documented;
(j) Adequate audit evidence has been obtained to enable the internal auditors to draw reasonable
conclusions:
(k) Conclusions reached appropriate in the circumstances and any reports prepared by the internal
auditors are consistent with the results of the work performed; and
(l) Any exceptions or unusual matters disclosed by the internal auditors are properly resolved.
If the external auditor intends to rely upon the work of the internal auditor, it is desirable that the
external auditor ascertains the internal auditor’s tentative plan for the year and discusses it with him at
as early a stage as possible to determine areas where he considers that he could rely upon the internal
auditor’s work.
The timing of such work, the extent of audit coverage, test levels and proposed methods of sample
selection, documentation of the work performed, and review and reporting procedures etc. should be
planned in advance.
Coordination with the internal auditor is usually more effective when meetings between External and
Internal Auditors are held at appropriate intervals during the year.
Any significant matter that comes to the internal auditor’s attention and which he believes may affect
the work of the external auditor should be informed promptly and vice-versa.
The external auditor should document his conclusions in respect of the specific work which he has
reviewed.
When the external auditor uses specific work of the internal auditors, the external auditor shall
document conclusions regarding the evaluation of the adequacy of the work of the internal auditors, and
the audit procedures performed by the external auditor on that work.
The external auditor should also test the work of the internal auditor on which he intends to rely.
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15. SA710 – Comparatives
Page 15 of 17
This SA deals with the auditor’s responsibilities regarding comparative information in an audit of
financial statements.
When the financial statements of the prior period have been audited by a predecessor auditor or were
not audited, the requirements and guidance in SA 510 regarding opening balances also apply.
There are two different broad approaches to the auditor’s reporting responsibilities in respect of
comparative information, i.e., corresponding figures and comparative financial statements.
The objectives of the auditor are :-
(a) To obtain sufficient appropriate audit evidence about whether the comparative information
included in the financial statements has been presented, in all material respects, in accordance with
the requirements for comparative information in the applicable financial reporting framework; and
(b) To report in accordance with the auditor’s reporting responsibilities.
- The amounts and disclosures included in the financial statements in respect
of one or more prior periods in accordance with the applicable financial reporting framework.
- Comparative information where amounts and other disclosures for the prior
period are included as an integral part of the current period financial statements, and are intended to be
read only in relation to the amounts and other disclosures relating to the current period (referred to as
“current period figures”). The level of details presented in the corresponding amounts and disclosures is
dictated primarily by its relevance to the current period figures.
Comparative information where amounts and other disclosures for
the prior period are included for comparison with the financial statements of the current period but, if
audited, are referred to in the auditor’s opinion. The level of information included in those comparative
financial statements is comparable with that of the financial statements of the current period.
The auditor should obtain sufficient appropriate audit evidence that the corresponding figures meet the
requirements of the relevant financial reporting framework.
The extent of audit procedures performed on the corresponding figures is significantly less than that for
the audit of the current period figures and is ordinarily limited to ensuring that the corresponding figures
have been correctly reported and are appropriately classified.
This involves the auditor assessing whether:
(a) accounting policies used for the corresponding figures are consistent with those of the current
period or whether appropriate adjustments and/or disclosures have been made; and
(b) corresponding figures agree with the amounts and other disclosures presented in the prior period or
whether appropriate adjustments and/or disclosures have been made.
The incoming auditor should assess compliance with SA 510, "Initial Engagements-Opening Balances".
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16. Page 16 of 17
If the auditor becomes aware of a possible material misstatement in the comparative information while
performing the current period audit, the auditor shall perform such additional audit procedures as are
necessary in the circumstances to obtain sufficient appropriate audit evidence to determine whether a
material misstatement exists.
If the auditor had audited the prior period’s financial statements, the auditor shall also follow the
relevant requirements of SA 560.
As required by SA 580, the auditor shall request written representations for all periods referred to in the
auditor’s opinion. The auditor shall also obtain a specific written representation regarding any prior
period item that is separately disclosed in the current year’s statement of profit and loss.
When the comparatives are presented as corresponding figures, the auditor's report
specifically identify comparatives because the auditor’s opinion is on the current period financial
statements as a whole, including the corresponding figures.
If the auditor’s report on the prior period, as previously issued, included a qualified opinion, a disclaimer
of opinion, or an adverse opinion and the matter which gave rise to the modification is unresolved, the
auditor the auditor’s opinion on the current period’s financial statements.
If the auditor’s report on the prior period, as previously issued, included a qualified opinion, disclaimer
of opinion, or adverse opinion and the matter which gave rise to the modification is resolved and
properly dealt with in the financial statements, the current report does not ordinarily refer to the
previous modification. However, if the matter is material to the current period, the auditor may include
an emphasis of matter paragraph dealing with the situation.
If the financial statements of the prior period were audited by a predecessor auditor and the auditor is
permitted by law or regulation to refer to the predecessor auditor’s report on the corresponding figures
and decides to do so, the auditor shall state in an Other Matter paragraph in the auditor’s report:
(a) That the financial statements of the prior period were audited by the predecessor auditor;
(b) The type of opinion expressed by the predecessor auditor and, if the opinion was modified, the
reasons therefore; and
(c) The date of that report.
If the prior period financial statements were not audited, the auditor shall state in the auditor’s report
that the corresponding figures are unaudited. Such a statement does not, however, relieve the auditor
of the requirement to obtain sufficient appropriate audit evidence that the opening balances do not
contain misstatements that materially affect the current period’s financial statements.
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17. Page 17 of 17
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