ASA 200 establishes the overall objectives and requirements for conducting an audit in accordance with Australian Auditing Standards. The objectives are to obtain reasonable assurance about whether the financial report is free from material misstatement and to report on the financial report in accordance with the auditor's findings. The auditor must comply with relevant ethical standards and exercise professional judgement and skepticism. The audit must be planned and performed to reduce audit risk to an acceptable level in order to draw reasonable conclusions and provide an opinion. The auditor must understand and comply with all applicable Australian Auditing Standards.

1. ASA 200
OVERALL OBJECTIVES OF THE
INDEPENDENT AUDITOR AND THE
CONDUCT OF AN AUDIT
IN ACCORDANCE WITH AUSTRALIAN
AUDITING STANDARDS
(Clarity format)
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Presented by :
Anjana Jogi
Hussaini Sayed

2. Application
 Applies to the yearly and half yearly financial reports..
 The Audit of financial reports for any financial
information / purposes.
Pursuant To
 section 227 B of the Australian Securities and
investment Commission act 2001 and
 section 336 of the corporation act 2001.
Overall objective of an independent auditor
In conducting an audit of a financial report, the overall
objectives of the auditor are:
 To obtain reasonable assurance about whether financial
report as a whole is free from material misstatement.
 To report on the financial report, and communicate as
required by the Australian Auditing Standards, in
accordance with the auditor’s findings. 2

3.  ETHICAL REQUIREMENT
The auditor shall comply with ethical requirement as
defined in ASA 102 when performing audits, reviews and
other assurance engagements.
 Independence of mind and
 Independence in appearance
Also relevant ASQC 1 & APS 5
 SCOPE OF AN AUDIT
In determining the audit procedures to be performed in
conducting an audit in accordance with Auditing
Standards, the auditor shall comply with each of the
Auditing Standards relevant to the audit.
 REASONALBLE ASSURANCE
The auditor shall obtain reasonable assurance to whether
the financial report taken as a whole is free from material
misstatement whether due to fraud or error.
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4.  PROFESSIONAL JUDGEMENT AND SCEPTICISM
 The auditor shall plan and perform an audit by exercising professional
judgement. because interpretation of relevant ethical requirements
and the informed decisions cannot be made without the application of
relevant knowledge and experience to the facts and circumstance.
 The auditor shall perform an audit with an attitude of professional
scepticism assuming that material misstatement may exist. ASA 200
explains that professional scepticism is necessary to the critical
assessment of audit evidence, that this attitude must be maintained
throughout the audit with alertness.
 AUDIT RISK
The auditor shall plan and perform the audit to reduce audit risk to an
acceptable low level that is consistent with the objective of an audit.
and thereby enable the auditor to draw reasonable conclusions on
which to base the auditor’s opinion. ASA 200 provides extensive
guidance on what constitutes sufficient appropriate audit risk. It
provides also discussion of ‘audit risk’, ‘risks of material misstatement’,
‘inherent risk’, ‘control risk’, ‘detection risk’. 4

5. Conduct of an Audit in Accordance
with Australian Auditing Standard
 COMPLIANCE
The auditor shall comply with all Australian Auditing Standards
relevant to the audit. An Auditing Standard is relevant to the audit
when the Auditing Standard is in effect and the circumstances
addressed by the Auditing Standard exist. In few cases, in addition to
complying with each of the Australian Auditing Standards relevant to
the audit, it may be necessary for the auditor to perform additional
audit procedures in order to comply with the relevant standards of that
jurisdiction or country.
 UNDERSTANDING
The auditor shall have an understanding of the entire text of an
Auditing Standard, including its application and other explanatory
material, to understand its objectives and to apply its requirements
properly.
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6. CONCLUSION
ASA 200 prescribes mandatory general principles
to be applied by the auditor in relation to:
I. Compliance with ethical requirements and Auditing
Standards (ASAs);
II.Application of professional judgement and
scepticism, and
III.Reduction of audit risk to an acceptably low level
consistent with the objective of an audit.
IV. Compliance with the auditing standards in audit
procedures with a reasonable understanding of the
standards.
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