This document provides an overview of the Auditing & Assurance Standards (AAS) issued by the Institute of Chartered Accountants of India. It summarizes 35 AAS standards, beginning with AAS 1 on basic principles governing an audit issued in 1985. The standards cover topics such as audit evidence, risk assessment, internal control, reliance on internal/other auditors, representations, materiality, analytical procedures, sampling, going concern, quality control, estimates, subsequent events, laws/regulations, related parties, service organizations, comparatives, terms of engagement, communication with governance, auditor reporting, computer systems auditing, confirmations, compilation/review of financial statements, agreed upon procedures, and prospective financial information. The

1. Auditing & Assurance
UNIT 1 : AUDITING & ASSURANCE STANDARDS (AAS)

2. Auditing & Assurance
Standards

3. AAS 1: Basic Principles Governing an Audit
 First standard on auditing issued by Institute
 It seeks to lie down and briefly explain the basic principles governing an
auditors professional responsibilities and should be complied with whenever
the audit is conducted
 Principles are namely, integrity, objectivity and independence, confidentiality,
skills and competence, worked performed by others , documentation,
planning, audit evidence, accounting system and internal control, and finally
audit conclusion and reporting
 Implemented in the beginning of period April 1, 1985

4. AAS 2: Objective and Scope of the Audit of Financial Statements
 All the audit of Balance Sheet & Profit & Loss A/c will have specific objective
and scope
 AAS 2 become operative to all audits from the year beginning April 1, 1985

5. AAS 3: Documentation
 Documentation refers to the working paper prepared or obtained by the
auditor and retained by him, in connection with the performance of audit
 It states that the auditor should document ,atters which are important in
providing evidence that the audit was carried out in accordance with the
generally accepted auditing standards in India.
 This standards explains that what constitute working papers, need of
working papers
 Applicable in the year July 1, 1985

6. AAS 4: Auditor’s Responsibility to Consider Fraud and Error in an Audit
of Financial Statements (Revised)
 Scope AAS-4 includes fraud and error and their characteristics, responsibility
of those charged with governance, responsibility of management,
responsibility of auditor, indication of possible misstatement, evaluation and
disposition of misstatements.
 Applied in the year April 1, 2003

7. AAS 5: Audit Evidence
 Auditor should obtain sufficient appropriate audit evidence through
compliance and substantive procedures to enable him to draw reasonable
conclusion there from on which to base his opinion on the financial
information.
 Also explains the concept of sufficient appropriate evidence, factors affecting
it and various types of assertions
 Applied from January 1, 1989

8. AAS 6: Risk Assessment and Internal Control (Revised)
 AAS-6 established standards on the procedures to be followed to obtain an
understanding of the accounting and internal control systems and on audit
risk and its components
 Audit Risk : Inherent Risk, Control Risk and Detection risk
 Applied from April 1, 2002

9. AAS 7: Relying on the work of an Internal Auditor
 Explains scope and objective of internal audit function, relationship between
internal and external auditor, aspects to be considered in evaluating the
internal audit function, coordination between internal and external auditor,
evaluating specific internal audit work
 Operated from April 1, 1989

10. AAS 8: Audit Planning
 Establishes standards on the principles that the auditor should plan his work
to enable him to conduct an effective audit in an efficient manner and that
the plan should be based on the knowledge of the client’s business
 Operated from April 1, 1989

11. AAS 9: Using the Work of an Expert
 Explains the Auditor responsibility in relation to, and the procedures the
auditor should consider in, using the work of an expert as audit evidence.
 Operated from April 1, 1991

12. AAS 10: Using the Work of another Auditor
 Explains the procedures to be adopted by the principal auditor when using
the work of ‘other auditor’, need for evaluating the professional competence
of the ‘other auditor’, documentation coordination between principal and
other auditor, reporting consideration for the principal auditor, and the
division of responsibility
 Operated from April 1, 2002

13. AAS 11: Representations by the Management
 Explains standards on the use of representation by the management as ausit
evidence.
 Operated from April 1, 1995

14. AAS 12: Responsibility of Joint Auditor
 The practice of appointing more than one auditor to conduct the audit of
large entities has been in vogue for a long time. Such Auditors are known as
Joint Auditors
 Deals with possible bases of division of work and coordination among joint
auditors, joint and several liability of joint auditors, responsibility for
obtaining and evaluating information and explanation from management,
responsibility for scrutiny of branch accounts and returns, need for review of
worked performed by one joint auditor or by other joint auditor, reporting
responsibilities, etc
 Operated from April 1, 1996

15. AAS 13: Audit Materiality
 Auditor should consider materiality and its relationship with audit risk
while conducting an audit.
 Misstatements including omission or erroneous statements are considered to
be material
 Operated from April 1, 1996

16. AAS 14: Analytical Procedure
 Analytical Procedure means the analysis of significant ratios and trends,
including resulting investigations of fluctuations and relationships that are
inconsistent with other relevant
 Inspection, Observation, External Confirmation, Inquiry, reperformance,
recalculation, analytical procedures
 Operated from April 1, 1998

17. AAS 15: Audit Sampling
 Establishes standards on the design and selection of an audit sample and the
evaluation of sample results.
 Operated from April 1, 1998

18. AAS 16: Going Concern
 Paragraph 5 and 6 of AAS 16, dealing with Going Concerns provide as
follows:
• 5. the Auditor should consider the risk that the going concern assumption
may no longer be appropriate
• 6. indications of the risk that continuance as a going concern may be
questionable could come from the financial statements or from other sources
 Operated from April 1, 1999

19. AAS 17: Quality Control for Audit Work
 Established standards on quality control policies and procedures of an audit
firm regarding audit work generally
 Also provides procedures regarding the work delegated to assistants on an
individual audit
 Operated from April 1, 1999

20. AAS 18: Audit of Accounting Estimates
 Establishes standards on the audit of Accounting Estimates
 Accounting Estimates refers to an approximation of the amount of an item in
the absence of precise means of measurement.
 Operated from April 1, 2000

21. AAS 19: Subsequent Events
 Lay down the responsibility of the auditor in respect of subsequent event
 Subsequent Events means significant events occurring between the balance
Sheet date and the date of auditors report
 Operated from April 1, 2000

22. AAS 20: Knowledge of the Business
 Establishes standards on what is the knowledge of the business, why is it
important to the auditor, and to its audit staff working on an engagement
 Operated from April 1, 2000

23. AAS 21: Consideration of Laws and Regulation in an Audit of
Financial Statements
 Deals with such aspects as responsibility of the management for compliance
with laws and regulations, auditors considerations of the compliance with
the laws and regulations, audit procedures with non-compliance is
discovered, reporting non-compliance to management/users of audited
financial statements, regulators and situation for withdrawal of engagement
 Operated from July 1, 2000

24. AAS 22: Initial Engagements-Opening Balance
 Establish standards regarding audit of opening balances in case of initial
engagements
 Operated from July 1, 2000

25. AAS 23: Related Parties
 Establishes standards on auditor responsibilities and audit procedures
regarding related parties and related party transactions.
 Operated from April 1, 2001

26. AAS 24: Audit consideration relating to Entities using Service
Organizations
 Establishes standards for an auditor whose clients uses service organization
 Operated from April 1, 2003

27. AAS 25: Comparatives
 Established standards regarding Comparatives
 Does not deal with the situations when summarized financial statements or
data are presented with the audited financial statements
 Should determine whether the comparative comply, in all material respects,
with the financing reporting framework relevant to the financial statement
being audited
 Operated from April 1, 2003

28. AAS 26: Terms of Audit Engagements
 Established standards on agreeing to the terms of audit engagements with
the clients and auditor response to a request by a client to change the terms
of an engagements to one that provides lower level of assurance
 Operated from April 1, 2003

29. AAS 27: Communication of Audit matters with those Charged
with Corporate Governance
 Establishes standards on Communication of Audit matters with those Charged
with Corporate Governance
 Operated from April 1, 2003

30. AAS 28: Auditor report on financial statements
 Establishes standards on how to prepare a audit report on financial
statements for any particular period
 Operated from April 1, 2003

31. AAS 29: Auditing in a Computer Information Systems Environment
 Establishes standards of procedures to be followed for auditing in a computer
information system environment
 Operated from April 1, 2003

32. AAS 30: External Confirmations
 Establishes standards on External Confirmations which is an important form od audit
evidence
 Operated from April 1, 2003

33. AAS 31: Engagement to Compile Financial Information
 Establishes standards on professional responsibilities of an accountant when an
engagement to compile financial statements or other financial information is
undertaken
 Operated from April 1, 2004

34. AAS 32: Engagement to Perform to Agreed-upon Procedures regarding
Financial Information
 The objective of an agreed upon procedures engagement is for the auditor to carry
out procedures of an audit nature to which the auditor and the entity and any
appropriate third parties have agreed and to report on factual findings
 Operated from April 1, 2004

35. AAS 33: Engagement to Review Financial Statements
 Establish standards and provide guidance on the auditor’s professional
responsibilities when an engagement to review financial statements is undertaken
and on the form and content of the report of that auditor issues in connection with
such a review
 Operated from April 1, 2005

36. AAS 34: Audit Evidence- Addition consideration for specific item
 Establish standards on auditors responsibilities, audit procedures and provide
guidance, in addition to that provide in AAS 5,”Audit Evidence”, with respect to
certain specific financial amount and other disclosures
 Operated from April 1, 2005

37. AAS 35: The examination of prospective financial information
 Establish standards and provide guidance on engagement to examine and report on
prospective financial information including examination procedures for best
estimates and hypothetical assumptions.
 Operated from April 1, 2007

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