This document is an International Standard on Auditing (ISA) that deals with an auditor's responsibility to apply the concept of materiality in planning and performing an audit of financial statements. It discusses determining materiality and performance materiality levels when planning an audit, revising these levels as the audit progresses, and documentation requirements. The standard provides requirements and application guidance on these topics to assist auditors in appropriately applying the concept of materiality.
C:\Fakepath\Isa 805 Special Considerations—Audits Of Single Financial Stateme...guest4a971d
This document provides guidance for auditors conducting audits of single financial statements or specific elements of financial statements. It outlines key considerations for accepting the engagement, planning and performing the audit, and forming an opinion and reporting. When auditing a single statement or element, auditors should comply with all relevant auditing standards and determine if such an audit is practicable. They must also evaluate if the applicable financial reporting framework provides adequate disclosures to understand the information presented. The auditor's report must include a separate opinion for each audit engagement and differentiate opinions on single statements from opinions on complete financial statements.
This document outlines the International Standard on Auditing 705 regarding modifications to the auditor's opinion in the independent auditor's report. It defines the types of modified opinions as qualified, adverse, or disclaimer and the circumstances that would require each. It provides requirements on determining and expressing the type of modified opinion, including the form and content of the auditor's report. It addresses implications of an inability to obtain sufficient evidence due to management limitations.
C:\Fakepath\Isa 710 Comparative Information—Corresponding Figures And Compara...guest4a971d
This document is an International Standard on Auditing (ISA) that addresses the auditor's responsibilities relating to comparative information in an audit of financial statements. It discusses two approaches to comparative information - corresponding figures and comparative financial statements. It provides requirements and guidance for the auditor regarding audit procedures on comparative information and audit reporting related to comparative information. The document contains definitions, requirements for audit procedures and audit reporting, and application guidance including illustrations of auditor's reports.
C:\fakepath\isa 810 engagements to report on summary financial statements en ...guest4a971d
The document outlines International Standards on Auditing for engagements to report on summary financial statements. It provides requirements for auditors to:
- Accept the engagement only if they have audited the underlying financial statements
- Determine if the criteria for preparing the summary statements are acceptable
- Obtain management agreement to make the audited statements available and include the auditor's report
- Compare the summary statements to the audited statements to evaluate if they are consistent
- Evaluate if the summary statements properly disclose their nature and provide necessary information without being misleading.
C:\Fakepath\Isa 805 Special Considerations—Audits Of Single Financial Stateme...guest4a971d
This document provides guidance for auditors conducting audits of single financial statements or specific elements of financial statements. It outlines key considerations for accepting the engagement, planning and performing the audit, and forming an opinion and reporting. When auditing a single statement or element, auditors should comply with all relevant auditing standards and determine if such an audit is practicable. They must also evaluate if the applicable financial reporting framework provides adequate disclosures to understand the information presented. The auditor's report must include a separate opinion for each audit engagement and differentiate opinions on single statements from opinions on complete financial statements.
This document outlines the International Standard on Auditing 705 regarding modifications to the auditor's opinion in the independent auditor's report. It defines the types of modified opinions as qualified, adverse, or disclaimer and the circumstances that would require each. It provides requirements on determining and expressing the type of modified opinion, including the form and content of the auditor's report. It addresses implications of an inability to obtain sufficient evidence due to management limitations.
C:\Fakepath\Isa 710 Comparative Information—Corresponding Figures And Compara...guest4a971d
This document is an International Standard on Auditing (ISA) that addresses the auditor's responsibilities relating to comparative information in an audit of financial statements. It discusses two approaches to comparative information - corresponding figures and comparative financial statements. It provides requirements and guidance for the auditor regarding audit procedures on comparative information and audit reporting related to comparative information. The document contains definitions, requirements for audit procedures and audit reporting, and application guidance including illustrations of auditor's reports.
C:\fakepath\isa 810 engagements to report on summary financial statements en ...guest4a971d
The document outlines International Standards on Auditing for engagements to report on summary financial statements. It provides requirements for auditors to:
- Accept the engagement only if they have audited the underlying financial statements
- Determine if the criteria for preparing the summary statements are acceptable
- Obtain management agreement to make the audited statements available and include the auditor's report
- Compare the summary statements to the audited statements to evaluate if they are consistent
- Evaluate if the summary statements properly disclose their nature and provide necessary information without being misleading.
The document discusses professional standards and regulations for auditors and accounting firms. It covers the authorities that set standards, such as the PCAOB and AICPA. It also discusses generally accepted auditing standards, including general standards, standards of fieldwork, and standards of reporting. The hierarchy of accounting guidance under GAAP is presented. The roles of auditing organizations in regulating the profession are defined.
This document is International Standard on Auditing (ISA) 706 (Revised), which provides requirements and guidance for emphasis of matter paragraphs and other matter paragraphs that may be included in the independent auditor's report. It discusses when such paragraphs are necessary to draw users' attention to matters that are fundamental to understanding the financial statements or the audit. The standard also addresses the relationship between these types of additional communication and key audit matters reported in accordance with ISA 701. Requirements are provided regarding the form and content of emphasis of matter and other matter paragraphs.
This document provides guidance for auditors conducting audits of banks' financial statements. It discusses key characteristics of banks that distinguish them from other commercial entities, including their custody of large amounts of monetary assets, high leverage, complex transactions, and regulatory requirements. The document outlines objectives for bank financial statement audits and emphasizes planning procedures, including obtaining an understanding of the bank's business, governance, products/services, and accounting and internal control systems. It provides examples of internal controls and substantive audit procedures for key bank operations.
Audit Reports and Relevant Standards on Auditing (2019)Rohan Tauro
This presentation speaks about SAs 700 (Revised), 701, 705 (Revised) and 706 (Revised) in the context of an Independent Auditor's Report for companies incorporated in India
Isa 700 Forming An Opinion And Reporting On Financial Statements En Inglesguest4a971d
- The document is an international standard on auditing that deals with an auditor's responsibility to form an opinion on financial statements and to express that opinion clearly in a written audit report.
- The objectives of the auditor are to form an opinion on whether the financial statements are prepared in accordance with the applicable financial reporting framework, and to express this opinion clearly in the audit report.
- The auditor must conclude whether sufficient appropriate audit evidence was obtained to form an opinion, whether any uncorrected misstatements are material, and whether various qualitative aspects of the financial statements are in accordance with the financial reporting framework.
SA 706," Emphasis of Matter Paragraph and Other Matter Paragraph in the Indep...Dipendra Prasad Poudel
The very precise presentation regarding SA 706. It was prepared for technical session of Article Assistants in N.Kochhar and Co ( Chartered Accountants). Hope it will help you.
Happy Reading
This document provides guidance for auditors on considering environmental matters during an audit of financial statements. It discusses how environmental risks could impact inherent risk assessments and financial statements. It provides examples of how environmental laws, non-compliance, and cleanup costs could require asset impairments, accruals, or contingent liabilities. The document gives guidance on obtaining knowledge of environmental risks during planning, assessing accounting estimates and unusual transactions, and evaluating internal controls related to environmental compliance. Appendices provide sample questions for understanding a company's environmental risks and controls, and substantive audit procedures to detect environmental misstatements.
This document is the International Standard on Auditing 700 (Revised) which provides requirements and guidance for forming an opinion and reporting on financial statements. Some key points:
- The objectives of the auditor are to form an opinion on the financial statements based on an evaluation of the audit evidence obtained, and to express this opinion clearly in a written report.
- The auditor must evaluate whether the financial statements are prepared in accordance with the applicable financial reporting framework. For fair presentation frameworks, the auditor must also evaluate if the statements achieve fair presentation.
- The auditor must express an unmodified opinion if they conclude the financial statements are prepared in accordance with the framework. Otherwise the opinion must be modified.
- The auditor
- The document outlines International Standard on Assurance Engagements 3400 which establishes standards and guidance for engagements to examine and report on prospective financial information.
- It discusses key aspects of such engagements including the auditor's assurance responsibilities, acceptance of the engagement, examination procedures, presentation and disclosure requirements, and the content of reports on examinations of prospective financial information.
- The standard is intended to apply to examinations of best-estimate and hypothetical assumptions in prospective financial information but does not apply to general or narrative prospective financial information.
C:\Fakepath\Isa 800 Special Considerations—Audits Of Financial Statements Pre...guest4a971d
- The document provides international standards on auditing special purpose financial statements prepared under a special purpose framework.
- It outlines requirements for accepting the engagement, planning and performing the audit, and forming an opinion and reporting considerations.
- Appendices include examples of auditor's reports on special purpose financial statements prepared for a tax basis, regulatory compliance, and contractual compliance.
The document discusses the relationship between banking supervisors and banks' external auditors. It outlines their respective roles and responsibilities. The banking supervisor is responsible for prudential supervision and ensuring the stability of the banking system, while the external auditor conducts audits of banks' financial statements to express an opinion on whether they are fairly presented. The document suggests that greater communication and understanding between the two can strengthen supervision and auditing, to the benefit of both. It provides guidance for supervisors and auditors to make effective use of each other's work.
Isa 705 Modifications To The Opinion In The Independent Auditor’S Report En I...guest4a971d
- The document is an International Standard on Auditing (ISA) that provides requirements and guidance for auditors when the audit opinion is modified from an unmodified opinion.
- There are three types of modified opinions: qualified opinion, adverse opinion, and disclaimer of opinion. The type of modification depends on the nature and pervasiveness of the matter giving rise to the modification.
- The auditor is required to modify the opinion if the financial statements are materially misstated or if the auditor is unable to obtain sufficient audit evidence to conclude that the financial statements are free from material misstatement.
The document discusses the process and procedures for conducting a stock audit in banks. It covers the meaning and purpose of stock audits, relevant auditing standards, the various stages of a stock audit including planning, fieldwork procedures, and reporting. Key procedures discussed include verifying physical inventory, assessing valuation of stock, analyzing debtors, recalculating drawing power, and ensuring adequate insurance coverage. The document provides guidance on planning, documentation, analytical procedures, internal control evaluation, and addressing common deficiencies observed in cash credit accounts.
1) The document provides guidance to auditors on auditing financial statements where an entity engages in electronic commerce over public networks like the Internet.
2) It identifies specific matters for auditors to consider regarding how e-commerce may affect their assessment of risk, knowledge of the business, and identification of risks.
3) The growth of e-commerce introduces new elements of risk that must be addressed by the entity and considered by the auditor, such as security, transactions integrity, and legal/regulatory compliance across international boundaries.
This document is an International Standard on Auditing (ISA) that provides guidance on applying the concept of materiality in planning and performing an audit. It discusses determining materiality for the financial statements as a whole and for particular classes, accounts, or disclosures. It also addresses setting performance materiality at an amount less than overall materiality to appropriately reduce audit risk, and revising materiality as the audit progresses if needed. The objective is to appropriately apply materiality in planning and performing the audit.
- The document provides guidance for auditors on applying the concept of materiality in planning and performing an audit of financial statements. It discusses determining materiality for the financial statements as a whole and for particular classes of transactions, account balances, or disclosures.
- The document emphasizes that materiality is a matter of professional judgment and is affected by factors like the auditor's perception of user needs, the applicable financial reporting framework, the size or nature of misstatements, and the circumstances in which they occur.
- The auditor is instructed to determine performance materiality at less than the materiality level to reduce the risk that uncorrected misstatements exceed materiality. Materiality levels may need revision as the audit progresses based on new
The document discusses professional standards and regulations for auditors and accounting firms. It covers the authorities that set standards, such as the PCAOB and AICPA. It also discusses generally accepted auditing standards, including general standards, standards of fieldwork, and standards of reporting. The hierarchy of accounting guidance under GAAP is presented. The roles of auditing organizations in regulating the profession are defined.
This document is International Standard on Auditing (ISA) 706 (Revised), which provides requirements and guidance for emphasis of matter paragraphs and other matter paragraphs that may be included in the independent auditor's report. It discusses when such paragraphs are necessary to draw users' attention to matters that are fundamental to understanding the financial statements or the audit. The standard also addresses the relationship between these types of additional communication and key audit matters reported in accordance with ISA 701. Requirements are provided regarding the form and content of emphasis of matter and other matter paragraphs.
This document provides guidance for auditors conducting audits of banks' financial statements. It discusses key characteristics of banks that distinguish them from other commercial entities, including their custody of large amounts of monetary assets, high leverage, complex transactions, and regulatory requirements. The document outlines objectives for bank financial statement audits and emphasizes planning procedures, including obtaining an understanding of the bank's business, governance, products/services, and accounting and internal control systems. It provides examples of internal controls and substantive audit procedures for key bank operations.
Audit Reports and Relevant Standards on Auditing (2019)Rohan Tauro
This presentation speaks about SAs 700 (Revised), 701, 705 (Revised) and 706 (Revised) in the context of an Independent Auditor's Report for companies incorporated in India
Isa 700 Forming An Opinion And Reporting On Financial Statements En Inglesguest4a971d
- The document is an international standard on auditing that deals with an auditor's responsibility to form an opinion on financial statements and to express that opinion clearly in a written audit report.
- The objectives of the auditor are to form an opinion on whether the financial statements are prepared in accordance with the applicable financial reporting framework, and to express this opinion clearly in the audit report.
- The auditor must conclude whether sufficient appropriate audit evidence was obtained to form an opinion, whether any uncorrected misstatements are material, and whether various qualitative aspects of the financial statements are in accordance with the financial reporting framework.
SA 706," Emphasis of Matter Paragraph and Other Matter Paragraph in the Indep...Dipendra Prasad Poudel
The very precise presentation regarding SA 706. It was prepared for technical session of Article Assistants in N.Kochhar and Co ( Chartered Accountants). Hope it will help you.
Happy Reading
This document provides guidance for auditors on considering environmental matters during an audit of financial statements. It discusses how environmental risks could impact inherent risk assessments and financial statements. It provides examples of how environmental laws, non-compliance, and cleanup costs could require asset impairments, accruals, or contingent liabilities. The document gives guidance on obtaining knowledge of environmental risks during planning, assessing accounting estimates and unusual transactions, and evaluating internal controls related to environmental compliance. Appendices provide sample questions for understanding a company's environmental risks and controls, and substantive audit procedures to detect environmental misstatements.
This document is the International Standard on Auditing 700 (Revised) which provides requirements and guidance for forming an opinion and reporting on financial statements. Some key points:
- The objectives of the auditor are to form an opinion on the financial statements based on an evaluation of the audit evidence obtained, and to express this opinion clearly in a written report.
- The auditor must evaluate whether the financial statements are prepared in accordance with the applicable financial reporting framework. For fair presentation frameworks, the auditor must also evaluate if the statements achieve fair presentation.
- The auditor must express an unmodified opinion if they conclude the financial statements are prepared in accordance with the framework. Otherwise the opinion must be modified.
- The auditor
- The document outlines International Standard on Assurance Engagements 3400 which establishes standards and guidance for engagements to examine and report on prospective financial information.
- It discusses key aspects of such engagements including the auditor's assurance responsibilities, acceptance of the engagement, examination procedures, presentation and disclosure requirements, and the content of reports on examinations of prospective financial information.
- The standard is intended to apply to examinations of best-estimate and hypothetical assumptions in prospective financial information but does not apply to general or narrative prospective financial information.
C:\Fakepath\Isa 800 Special Considerations—Audits Of Financial Statements Pre...guest4a971d
- The document provides international standards on auditing special purpose financial statements prepared under a special purpose framework.
- It outlines requirements for accepting the engagement, planning and performing the audit, and forming an opinion and reporting considerations.
- Appendices include examples of auditor's reports on special purpose financial statements prepared for a tax basis, regulatory compliance, and contractual compliance.
The document discusses the relationship between banking supervisors and banks' external auditors. It outlines their respective roles and responsibilities. The banking supervisor is responsible for prudential supervision and ensuring the stability of the banking system, while the external auditor conducts audits of banks' financial statements to express an opinion on whether they are fairly presented. The document suggests that greater communication and understanding between the two can strengthen supervision and auditing, to the benefit of both. It provides guidance for supervisors and auditors to make effective use of each other's work.
Isa 705 Modifications To The Opinion In The Independent Auditor’S Report En I...guest4a971d
- The document is an International Standard on Auditing (ISA) that provides requirements and guidance for auditors when the audit opinion is modified from an unmodified opinion.
- There are three types of modified opinions: qualified opinion, adverse opinion, and disclaimer of opinion. The type of modification depends on the nature and pervasiveness of the matter giving rise to the modification.
- The auditor is required to modify the opinion if the financial statements are materially misstated or if the auditor is unable to obtain sufficient audit evidence to conclude that the financial statements are free from material misstatement.
The document discusses the process and procedures for conducting a stock audit in banks. It covers the meaning and purpose of stock audits, relevant auditing standards, the various stages of a stock audit including planning, fieldwork procedures, and reporting. Key procedures discussed include verifying physical inventory, assessing valuation of stock, analyzing debtors, recalculating drawing power, and ensuring adequate insurance coverage. The document provides guidance on planning, documentation, analytical procedures, internal control evaluation, and addressing common deficiencies observed in cash credit accounts.
1) The document provides guidance to auditors on auditing financial statements where an entity engages in electronic commerce over public networks like the Internet.
2) It identifies specific matters for auditors to consider regarding how e-commerce may affect their assessment of risk, knowledge of the business, and identification of risks.
3) The growth of e-commerce introduces new elements of risk that must be addressed by the entity and considered by the auditor, such as security, transactions integrity, and legal/regulatory compliance across international boundaries.
This document is an International Standard on Auditing (ISA) that provides guidance on applying the concept of materiality in planning and performing an audit. It discusses determining materiality for the financial statements as a whole and for particular classes, accounts, or disclosures. It also addresses setting performance materiality at an amount less than overall materiality to appropriately reduce audit risk, and revising materiality as the audit progresses if needed. The objective is to appropriately apply materiality in planning and performing the audit.
- The document provides guidance for auditors on applying the concept of materiality in planning and performing an audit of financial statements. It discusses determining materiality for the financial statements as a whole and for particular classes of transactions, account balances, or disclosures.
- The document emphasizes that materiality is a matter of professional judgment and is affected by factors like the auditor's perception of user needs, the applicable financial reporting framework, the size or nature of misstatements, and the circumstances in which they occur.
- The auditor is instructed to determine performance materiality at less than the materiality level to reduce the risk that uncorrected misstatements exceed materiality. Materiality levels may need revision as the audit progresses based on new
This document summarizes International Standard on Auditing (UK) 320 (Revised June 2016) regarding materiality in planning and performing an audit. Some key points:
- The standard provides requirements and guidance for auditors on determining materiality levels and how to apply the concept of materiality.
- When planning an audit, the auditor determines materiality for the financial statements as a whole to be used in identifying risks and designing audit procedures. The auditor may also determine lower materiality levels for particular classes of transactions or account balances.
- The auditor determines performance materiality at less than overall materiality to reduce the risk that uncorrected and undetected misstatements exceed materiality.
- Materiality levels
Isa 300 Planning An Audit Of Financial Statements En Inglesguest4a971d
The document is an International Standard on Auditing that provides guidance on planning an audit of financial statements. It discusses the importance of planning, establishing an overall audit strategy, developing an audit plan, and documenting the strategy and plan. It requires the involvement of key engagement team members in planning. It also discusses additional considerations for initial audit engagements.
Isa 620 Using The Work Of An Auditor’S Expert En Inglesguest4a971d
This document provides guidance for auditors on using the work of an auditor's expert. It defines an auditor's expert as someone with expertise other than accounting or auditing whose work assists the auditor. It establishes the auditor's responsibilities regarding determining when expert assistance is needed, evaluating the expert's competence and objectivity, understanding their work, agreeing on roles, and assessing if the expert's work is adequate to support the audit opinion. The auditor remains solely responsible for the audit opinion, even when using an expert's work.
This document summarizes 10 Indian Standards on Auditing (SAs). It introduces each SA and provides an overview of its objective, scope, and key requirements. The SAs covered are SA 200, SA 210, SA 220, SA 300, SA 315, SA 330, SA 600, SA 450, SA 620, and SA 299. The document is intended to inform readers about the essential information in each SA regarding an auditor's responsibilities and compliance with quality standards.
This document discusses materiality and performance materiality in an audit. It defines materiality and performance materiality and explains how the auditor determines these amounts when planning and performing the audit. The auditor sets materiality for the financial statements as a whole and may also set materiality levels for particular accounts or disclosures. Performance materiality is set at an amount lower than materiality to reduce audit risk. The document also discusses how materiality and audit risk are related and how the auditor considers these concepts throughout the audit.
This document summarizes the International Standard on Auditing (ISA) 720 (Revised) regarding an auditor's responsibilities relating to other information in an entity's annual report.
The standard defines key terms such as annual report and other information. It requires the auditor to obtain the final version of the annual report, read and consider the other information to identify material inconsistencies with the financial statements or the auditor's knowledge.
If a material misstatement is identified, the auditor must discuss it with management and take appropriate actions such as requesting correction, considering implications for the audit report, or withdrawing from the engagement. The standard provides requirements for reporting on other information in the auditor's report.
International Staandards on Auditing 200FarhanNasir21
The document outlines the overall objectives and responsibilities of an independent auditor conducting an audit of financial statements in accordance with International Standards on Auditing (ISA). The objectives are to obtain reasonable assurance that the financial statements are free of material misstatement and to report the auditor's findings. The document also defines key terms, explains the auditor's requirements regarding professional judgment and skepticism, and addresses inherent limitations of an audit.
guidance_Research paper
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The document provides highlights of Standards on Auditing (SA) issued by the Institute of Chartered Accountants of India (ICAI). It summarizes key aspects of various SA standards including SA 200 on basic principles of an audit, SA 210 on terms of audit engagement, SA 220 on quality control, SA 230 on audit documentation, SA 240 on auditor responsibilities relating to fraud, SA 250 on consideration of laws and regulations, SA 260 on communication with those charged with governance, SA 299 on responsibilities of joint auditors, SA 300 on planning an audit, and SA 310 on knowledge of the business. The standards provide requirements for auditors to plan and perform audits in accordance with relevant professional and regulatory standards.
The document provides guidance on applying the changes in ISA 315 (Revised 2019) which establishes standards and provides guidance for identifying and assessing risks of material misstatement. It highlights some of the more substantial changes including:
- Separately assessing inherent risk and control risk.
- Introducing the concept of a spectrum of inherent risk and inherent risk factors to help assess inherent risk.
- Enhancing requirements to encourage greater professional skepticism and strengthened documentation.
- Illustrating scalability through contrasting examples for complex vs less complex entities.
- Explaining the "why" certain risk assessment procedures are required.
- Including considerations for using automated tools and techniques.
- Relocating certain application material
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 STANDARD ON AUDITING 200 (REVISED)
OVERALL OBJECTIVES OF THE INDEPENDENT AUDITOR AND THE
CONDUCT OF AN AUDIT IN ACCORDANCE WITH INTERNATIONAL
STANDARDS ON AUDITING
This document outlines Philippine Standard on Auditing 520 (Redrafted) regarding analytical procedures. It defines analytical procedures as evaluations of financial information through analysis of plausible relationships among financial and non-financial data. It requires the auditor to determine the suitability of analytical procedures for given assertions, evaluate the reliability of data used, develop an expectation of recorded amounts with sufficient precision, and determine an acceptable difference without further investigation. It also requires the auditor to design analytical procedures near the end of the audit to assist in forming an overall conclusion on the financial statements.
Planning an external audit of financial statementsAyesha Majid
A detailed analysis of what ISA 300 means and how its is ought to be implemented while conducting an audit in accordance with International Standards of Auditing.
SRS 4410 Enagement to complete financial informationRahul Sharma
This document establishes standards for compilation engagements in India. The objective of a compilation engagement is for an accountant to use accounting expertise to collect, classify, and summarize financial information, without testing assertions. Management is responsible for the financial information and internal controls. The accountant plans procedures, documents work, obtains an understanding of the entity and basis of accounting, and considers whether the information appears appropriate. If aware of material misstatements, the accountant should withdraw. The report should be titled "Accountant's Report on Compilation of Unaudited Financial Statements."
The document discusses audit risk, materiality, and their relationship. It defines audit risk as the probability that the auditor will issue an inappropriate opinion on the financial statements. Materiality refers to matters that are important for fair presentation of financial information according to accounting standards. The auditor considers both audit risk and materiality in planning the nature, timing, and extent of audit procedures to limit audit risk to an acceptable level. Audit risk and materiality affect judgments about misstatements and compliance with auditing standards.
13 Jun 24 ILC Retirement Income Summit - slides.pptxILC- UK
ILC's Retirement Income Summit was hosted by M&G and supported by Canada Life. The event brought together key policymakers, influencers and experts to help identify policy priorities for the next Government and ensure more of us have access to a decent income in retirement.
Contributors included:
Jo Blanden, Professor in Economics, University of Surrey
Clive Bolton, CEO, Life Insurance M&G Plc
Jim Boyd, CEO, Equity Release Council
Molly Broome, Economist, Resolution Foundation
Nida Broughton, Co-Director of Economic Policy, Behavioural Insights Team
Jonathan Cribb, Associate Director and Head of Retirement, Savings, and Ageing, Institute for Fiscal Studies
Joanna Elson CBE, Chief Executive Officer, Independent Age
Tom Evans, Managing Director of Retirement, Canada Life
Steve Groves, Chair, Key Retirement Group
Tish Hanifan, Founder and Joint Chair of the Society of Later life Advisers
Sue Lewis, ILC Trustee
Siobhan Lough, Senior Consultant, Hymans Robertson
Mick McAteer, Co-Director, The Financial Inclusion Centre
Stuart McDonald MBE, Head of Longevity and Democratic Insights, LCP
Anusha Mittal, Managing Director, Individual Life and Pensions, M&G Life
Shelley Morris, Senior Project Manager, Living Pension, Living Wage Foundation
Sarah O'Grady, Journalist
Will Sherlock, Head of External Relations, M&G Plc
Daniela Silcock, Head of Policy Research, Pensions Policy Institute
David Sinclair, Chief Executive, ILC
Jordi Skilbeck, Senior Policy Advisor, Pensions and Lifetime Savings Association
Rt Hon Sir Stephen Timms, former Chair, Work & Pensions Committee
Nigel Waterson, ILC Trustee
Jackie Wells, Strategy and Policy Consultant, ILC Strategic Advisory Board
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
“Amidst Tempered Optimism” Main economic trends in May 2024 based on the results of the New Monthly Enterprises Survey, #NRES
On 12 June 2024 the Institute for Economic Research and Policy Consulting (IER) held an online event “Economic Trends from a Business Perspective (May 2024)”.
During the event, the results of the 25-th monthly survey of business executives “Ukrainian Business during the war”, which was conducted in May 2024, were presented.
The field stage of the 25-th wave lasted from May 20 to May 31, 2024. In May, 532 companies were surveyed.
The enterprise managers compared the work results in May 2024 with April, assessed the indicators at the time of the survey (May 2024), and gave forecasts for the next two, three, or six months, depending on the question. In certain issues (where indicated), the work results were compared with the pre-war period (before February 24, 2022).
✅ More survey results in the presentation.
✅ Video presentation: https://youtu.be/4ZvsSKd1MzE
Monthly Market Risk Update: June 2024 [SlideShare]Commonwealth
Markets rallied in May, with all three major U.S. equity indices up for the month, said Sam Millette, director of fixed income, in his latest Market Risk Update.
For more market updates, subscribe to The Independent Market Observer at https://blog.commonwealth.com/independent-market-observer.
Madhya Pradesh, the "Heart of India," boasts a rich tapestry of culture and heritage, from ancient dynasties to modern developments. Explore its land records, historical landmarks, and vibrant traditions. From agricultural expanses to urban growth, Madhya Pradesh offers a unique blend of the ancient and modern.
Explore the world of investments with an in-depth comparison of the stock market and real estate. Understand their fundamentals, risks, returns, and diversification strategies to make informed financial decisions that align with your goals.
How to Invest in Cryptocurrency for Beginners: A Complete GuideDaniel
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A018 2010-iaasb-handbook-isa-320
1. INTERNATIONAL STANDARD ON AUDITING 320
MATERIALITY IN PLANNING
AND PERFORMINGAN AUDIT
(Effective for audits of financial statements for periods
beginning on or after December 15, 2009)
CONTENTS
Paragraph
Introduction
Scope of this ISA ........................................................................................ 1
Materiality in the Context of an Audit ........................................................ 2−6
Effective Date ............................................................................................. 7
Objective .................................................................................................... 8
Definition ................................................................................................... 9
Requirements
Determining Materiality and Performance Materiality When Planning
the Audit .............................................................................................. 10−11
Revision as the Audit Progresses ................................................................ 12−13
Documentation ............................................................................................ 14
Application and Other Explanatory Material
Materiality and Audit Risk ......................................................................... A1
AUDITING
Determining Materiality and Performance Materiality When Planning
the Audit .............................................................................................. A2−A12
Revision as the Audit Progresses ................................................................ A13
International Standard on Auditing (ISA) 320, “Materiality in Planning and
Performing an Audit” should be read in the context of ISA 200, “Overall Objectives
of the Independent Auditor and the Conduct of an Audit in Accordance with
International Standards on Auditing.”
313 ISA 320
2. MATERIALITY IN PLANNING AND PERFORMING AN AUDIT
Introduction
Scope of this ISA
1. This International Standard on Auditing (ISA) deals with the auditor’s
responsibility to apply the concept of materiality in planning and performing an
audit of financial statements. ISA 4501 explains how materiality is applied in
evaluating the effect of identified misstatements on the audit and of uncorrected
misstatements, if any, on the financial statements.
Materiality in the Context of an Audit
2. Financial reporting frameworks often discuss the concept of materiality in the
context of the preparation and presentation of financial statements. Although
financial reporting frameworks may discuss materiality in different terms, they
generally explain that:
• Misstatements, including omissions, are considered to be material if they,
individually or in the aggregate, could reasonably be expected to influence
the economic decisions of users taken on the basis of the financial
statements;
• Judgments about materiality are made in light of surrounding
circumstances, and are affected by the size or nature of a misstatement, or a
combination of both; and
• Judgments about matters that are material to users of the financial
statements are based on a consideration of the common financial
information needs of users as a group.2 The possible effect of misstatements
on specific individual users, whose needs may vary widely, is not
considered.
3. Such a discussion, if present in the applicable financial reporting framework,
provides a frame of reference to the auditor in determining materiality for the
audit. If the applicable financial reporting framework does not include a
discussion of the concept of materiality, the characteristics referred to in
paragraph 2 provide the auditor with such a frame of reference.
4. The auditor’s determination of materiality is a matter of professional judgment,
and is affected by the auditor’s perception of the financial information needs of
1
ISA 450, “Evaluation of Misstatements Identified during the Audit.”
2
For example, the “Framework for the Preparation and Presentation of Financial Statements,” adopted by
the International Accounting Standards Board in April 2001, indicates that, for a profit-oriented entity, as
investors are providers of risk capital to the enterprise, the provision of financial statements that meet
their needs will also meet most of the needs of other users that financial statements can satisfy.
ISA 320 314
3. MATERIALITY IN PLANNING AND PERFORMING AN AUDIT
users of the financial statements. In this context, it is reasonable for the auditor
to assume that users:
(a) Have a reasonable knowledge of business and economic activities and
accounting and a willingness to study the information in the financial
statements with reasonable diligence;
(b) Understand that financial statements are prepared, presented and audited to
levels of materiality;
(c) Recognize the uncertainties inherent in the measurement of amounts based
on the use of estimates, judgment and the consideration of future events;
and
(d) Make reasonable economic decisions on the basis of the information in the
financial statements.
5. The concept of materiality is applied by the auditor both 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
and in forming the opinion in the auditor’s report. (Ref: Para. A1)
6. In planning the audit, the auditor makes judgments about the size of misstatements
that will be considered material. These judgments provide a basis for:
(a) Determining the nature, timing and extent of risk assessment procedures;
(b) Identifying and assessing the risks of material misstatement; and
(c) Determining the nature, timing and extent of further audit procedures.
The materiality determined when planning the audit does not necessarily
establish an amount below which uncorrected misstatements, individually or in
the aggregate, will always be evaluated as immaterial. The circumstances
AUDITING
related to some misstatements may cause the auditor to evaluate them as
material even if they are below materiality. Although it is not practicable to
design audit procedures to detect misstatements that could be material solely
because of their nature, the auditor considers not only the size but also the
nature of uncorrected misstatements, and the particular circumstances of their
occurrence, when evaluating their effect on the financial statements.3
Effective Date
7. This ISA is effective for audits of financial statements for periods beginning on
or after December 15, 2009.
3
ISA 450, paragraph A16.
315 ISA 320
4. MATERIALITY IN PLANNING AND PERFORMING AN AUDIT
Objective
8. The objective of the auditor is to apply the concept of materiality appropriately
in planning and performing the audit.
Definition
9. For purposes of the ISAs, performance materiality means the amount or amounts
set by the auditor at less than materiality for the financial statements as a whole to
reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements exceeds materiality for the financial
statements as a whole. If applicable, performance materiality also refers to the
amount or amounts set by the auditor at less than the materiality level or levels for
particular classes of transactions, account balances or disclosures.
Requirements
Determining Materiality and Performance Materiality When Planning the Audit
10. When establishing the overall audit strategy, the auditor shall determine materiality
for the financial statements as a whole. If, in the specific circumstances of the
entity, there is one or more particular classes of transactions, account balances or
disclosures for which misstatements of lesser amounts than materiality for the
financial statements as a whole could reasonably be expected to influence the
economic decisions of users taken on the basis of the financial statements, the
auditor shall also determine the materiality level or levels to be applied to those
particular classes of transactions, account balances or disclosures. (Ref: Para. A2–
A11)
11. The auditor shall determine performance materiality for purposes of assessing
the risks of material misstatement and determining the nature, timing and
extent of further audit procedures. (Ref: Para. A12)
Revision as the Audit Progresses
12. The auditor shall revise materiality for the financial statements as a whole (and, if
applicable, the materiality level or levels for particular classes of transactions,
account balances or disclosures) in the event of becoming aware of information
during the audit that would have caused the auditor to have determined a different
amount (or amounts) initially. (Ref: Para. A13)
13. If the auditor concludes that a lower materiality for the financial statements as a
whole (and, if applicable, materiality level or levels for particular classes of
transactions, account balances or disclosures) than that initially determined is
appropriate, the auditor shall determine whether it is necessary to revise
performance materiality, and whether the nature, timing and extent of the further
audit procedures remain appropriate.
ISA 320 316
5. MATERIALITY IN PLANNING AND PERFORMING AN AUDIT
Documentation
14. The auditor shall include in the audit documentation the following amounts and
the factors considered in their determination:4
(a) Materiality for the financial statements as a whole (see paragraph 10);
(b) If applicable, the materiality level or levels for particular classes of
transactions, account balances or disclosures (see paragraph 10);
(c) Performance materiality (see paragraph 11); and
(d) Any revision of (a)–(c) as the audit progressed (see paragraphs 12–13).
***
Application and Other Explanatory Material
Materiality and Audit Risk (Ref: Para. 5)
A1. In conducting an audit of financial statements, the overall objectives of the
auditor are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, thereby enabling the auditor to express an opinion on whether
the financial statements are prepared, in all material respects, in accordance
with an applicable financial reporting framework; and to report on the financial
statements, and communicate as required by the ISAs, in accordance with the
auditor’s findings.5 The auditor obtains reasonable assurance by obtaining
sufficient appropriate audit evidence to reduce audit risk to an acceptably low
level.6 Audit risk is the risk that the auditor expresses an inappropriate audit
opinion when the financial statements are materially misstated. Audit risk is a
function of the risks of material misstatement and detection risk.7 Materiality
AUDITING
and audit risk are considered throughout the audit, in particular, when:
(a) Identifying and assessing the risks of material misstatement;8
(b) Determining the nature, timing and extent of further audit procedures;9 and
4
ISA 230, “Audit Documentation,” paragraphs 8–11, and A6.
5
ISA 200, “Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance
with International Standards on Auditing,” paragraph 11.
6
ISA 200, paragraph 17.
7
ISA 200, paragraph 13(c).
8
ISA 315, “Identifying and Assessing the Risks of Material Misstatement through Understanding the
Entity and Its Environment.”
9
ISA 330, “The Auditor’s Responses to Assessed Risks.”
317 ISA 320
6. MATERIALITY IN PLANNING AND PERFORMING AN AUDIT
(c) Evaluating the effect of uncorrected misstatements, if any, on the financial
statements10 and in forming the opinion in the auditor’s report.11
Determining Materiality and Performance Materiality When Planning the
Audit
Considerations Specific to Public Sector Entities (Ref: Para. 10)
A2. In the case of a public sector entity, legislators and regulators are often the primary
users of its financial statements. Furthermore, the financial statements may be used
to make decisions other than economic decisions. The determination of materiality
for the financial statements as a whole (and, if applicable, materiality level or levels
for particular classes of transactions, account balances or disclosures) in an audit of
the financial statements of a public sector entity is therefore influenced by law,
regulation or other authority, and by the financial information needs of legislators
and the public in relation to public sector programs.
Use of Benchmarks in Determining Materiality for the Financial Statements as a
Whole (Ref: Para. 10)
A3. Determining materiality involves the exercise of professional judgment. A
percentage is often applied to a chosen benchmark as a starting point in
determining materiality for the financial statements as a whole. Factors that may
affect the identification of an appropriate benchmark include the following:
• The elements of the financial statements (for example, assets, liabilities,
equity, revenue, expenses);
• Whether there are items on which the attention of the users of the
particular entity’s financial statements tends to be focused (for example,
for the purpose of evaluating financial performance users may tend to
focus on profit, revenue or net assets);
• The nature of the entity, where the entity is in its life cycle, and the
industry and economic environment in which the entity operates;
• The entity’s ownership structure and the way it is financed (for example, if
an entity is financed solely by debt rather than equity, users may put more
emphasis on assets, and claims on them, than on the entity’s earnings); and
• The relative volatility of the benchmark.
A4. Examples of benchmarks that may be appropriate, depending on the circumstances
of the entity, include categories of reported income such as profit before tax, total
10
ISA 450.
11
ISA 700, “Forming an Opinion and Reporting on Financial Statements.”
ISA 320 318
7. MATERIALITY IN PLANNING AND PERFORMING AN AUDIT
revenue, gross profit and total expenses, total equity or net asset value. Profit before
tax from continuing operations is often used for profit-oriented entities. When profit
before tax from continuing operations is volatile, other benchmarks may be more
appropriate, such as gross profit or total revenues.
A5. In relation to the chosen benchmark, relevant financial data ordinarily includes
prior periods’ financial results and financial positions, the period-to-date
financial results and financial position, and budgets or forecasts for the current
period, adjusted for significant changes in the circumstances of the entity (for
example, a significant business acquisition) and relevant changes of conditions
in the industry or economic environment in which the entity operates. For
example, when, as a starting point, materiality for the financial statements as a
whole is determined for a particular entity based on a percentage of profit
before tax from continuing operations, circumstances that give rise to an
exceptional decrease or increase in such profit may lead the auditor to conclude
that materiality for the financial statements as a whole is more appropriately
determined using a normalized profit before tax from continuing operations
figure based on past results.
A6. Materiality relates to the financial statements on which the auditor is reporting.
Where the financial statements are prepared for a financial reporting period of
more or less than twelve months, such as may be the case for a new entity or a
change in the financial reporting period, materiality relates to the financial
statements prepared for that financial reporting period.
A7. Determining a percentage to be applied to a chosen benchmark involves the
exercise of professional judgment. There is a relationship between the
percentage and the chosen benchmark, such that a percentage applied to profit
before tax from continuing operations will normally be higher than a
percentage applied to total revenue. For example, the auditor may consider five
percent of profit before tax from continuing operations to be appropriate for a
AUDITING
profit-oriented entity in a manufacturing industry, while the auditor may
consider one percent of total revenue or total expenses to be appropriate for a
not-for-profit entity. Higher or lower percentages, however, may be deemed
appropriate in the circumstances.
Considerations Specific to Small Entities
A8. When an entity’s profit before tax from continuing operations is consistently
nominal, as might be the case for an owner-managed business where the owner
takes much of the profit before tax in the form of remuneration, a benchmark
such as profit before remuneration and tax may be more relevant.
Considerations Specific to Public Sector Entities
A9. In an audit of a public sector entity, total cost or net cost (expenses less
revenues or expenditure less receipts) may be appropriate benchmarks for
319 ISA 320
8. MATERIALITY IN PLANNING AND PERFORMING AN AUDIT
program activities. Where a public sector entity has custody of public assets,
assets may be an appropriate benchmark.
Materiality Level or Levels for Particular Classes of Transactions, Account Balances
or Disclosures (Ref: Para. 10)
A10. Factors that may indicate the existence of one or more particular classes of
transactions, account balances or disclosures for which misstatements of lesser
amounts than materiality for the financial statements as a whole could
reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements include the following:
• Whether law, regulation or the applicable financial reporting framework
affect users’ expectations regarding the measurement or disclosure of
certain items (for example, related party transactions, and the
remuneration of management and those charged with governance).
• The key disclosures in relation to the industry in which the entity operates
(for example, research and development costs for a pharmaceutical
company).
• Whether attention is focused on a particular aspect of the entity’s
business that is separately disclosed in the financial statements (for
example, a newly acquired business).
A11. In considering whether, in the specific circumstances of the entity, such classes
of transactions, account balances or disclosures exist, the auditor may find it
useful to obtain an understanding of the views and expectations of those
charged with governance and management.
Performance Materiality (Ref: Para. 11)
A12. Planning the audit solely to detect individually material misstatements
overlooks the fact that the aggregate of individually immaterial misstatements
may cause the financial statements to be materially misstated, and leaves no
margin for possible undetected misstatements. Performance materiality (which,
as defined, is one or more amounts) is set to reduce to an appropriately low
level the probability that the aggregate of uncorrected and undetected
misstatements in the financial statements exceeds materiality for the financial
statements as a whole. Similarly, performance materiality relating to a
materiality level determined for a particular class of transactions, account
balance or disclosure is set to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements in
that particular class of transactions, account balance or disclosure exceeds the
materiality level for that particular class of transactions, account balance or
disclosure. The determination of performance materiality is not a simple
mechanical calculation and involves the exercise of professional judgment. It is
affected by the auditor’s understanding of the entity, updated during the
ISA 320 320
9. MATERIALITY IN PLANNING AND PERFORMING AN AUDIT
performance of the risk assessment procedures; and the nature and extent of
misstatements identified in previous audits and thereby the auditor’s
expectations in relation to misstatements in the current period.
Revision as the Audit Progresses (Ref: Para. 12)
A13. Materiality for the financial statements as a whole (and, if applicable, the
materiality level or levels for particular classes of transactions, account balances
or disclosures) may need to be revised as a result of a change in circumstances
that occurred during the audit (for example, a decision to dispose of a major part
of the entity’s business), new information, or a change in the auditor’s
understanding of the entity and its operations as a result of performing further
audit procedures. For example, if during the audit it appears as though actual
financial results are likely to be substantially different from the anticipated
period-end financial results that were used initially to determine materiality for
the financial statements as a whole, the auditor revises that materiality.
AUDITING
321 ISA 320