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.

1. STANDARDS
ON
AUDITING
BY: ANMOL GULATI
2013360

2. INTRODUCTION
To ensure that information provided in the financial statements are of high quality and are
acceptable worldwide the Auditing and Assurance Standards board under the council
ICAI have formulated few Standards. These are in line with the International Standards
issued by the International Auditing and Assurance Board (IAASB).
Standards issued by the
AASB include
Standards of Quality
Control (SQCs)
Standards on Auditing
(SAs)

4. 1. SA-200

5. Effective Date
This SA-200 is effective for
audits of financial statements
for periods beginning on or
after April 1, 2010.

6. AUDITOR RESPONSIBILITY (OVERALL OBJECTIVE OF INDEPENDENT
AUDIT)
● To obtain reasonable assurance that financial statements are free from Material
Mismanagement resulting from either due to fraud or error enabling Auditor to
express an opinion on whether financial statements are prepared in all material
respects as per applicable Financial reporting framework.
● The objective of independent audit is to report u/s 143(2) to Members of
Company on Account examined by him & Financial Statement to be laid in AGM.
● To ensure that his opinion on Financial Statement is reflecting the True & Fair
view.
● The objective of independent audit to State in his Report u/s 143(2) whether A/c
examined by him & Financial Statement give True & Fair view.
● Audit evidence to reduce Audit Risk to Acceptable low level & consider SA 500 as
per SA 200.

7. SCOPE OF AUDIT
Area of work for Auditor determined by following factors: –
● Requirements of legislation.
● SA & other guidance by ICAI
● Terms of engagement of Auditor:
Terms of engagement can’t override Scope decided by Legislation or SAs.”
(i.e. management cannot Restrict Scope of auditor’s audit function)
● If Scope restricted or threat to Independence, in this case auditors duty is to
communicate to Those charged with governance as per SA 260

8. REQUIREMENTS OF SA 200
● Professional Skepticism
● Its auditor’s states of mind for Alertness to for any indication to possible misstatement due to error or fraud
● A critical assessment of audit evidence
● Maintain it throughout Audit to identify fraud risk factors & evaluate Related Party transactions
● Attitude requiring: –
○ Alertness towards Info provided to him by client
○ A Questionable mind being alert
● Reduces Risks of: –
○ Overlooking unusual circumstances.
○ Overgeneralizing when drawing conclusions from audit observations.
○ Using inappropriate assumptions in determining Nature, Time & Extent of Audit Procedures & evaluating
results
● Being alert to: –
○ Info provided by the auditee to bringing in doubt the trustworthiness of records & responses to audit evidence.
○ Conditions and situations creating doubt for fraud or and auditor’s competence to assess the need to carry out
additional Audit Procedures.

10. 2. SA 210 (REVISED)
Agreeing The Terms of
Audit Engagement

11. SA 210 (REVISED) Agreeing The Terms
of Audit Engagement
SA 210 deals with the key considerations that
Independent Auditor needs to keep in mind on
the terms of the Audit engagement with
Management or ‘Those charged with
Governance’.

12. INTRODUCTION & SCOPE
This Revised Standard on Auditing (SA 210) deals with the
auditor’s responsibilities in agreeing to the terms of the
audit engagement with management. SA 210 establishes
the preconditions for an audit, terms of an audit
engagement and changes thereof, segregates the
responsibility of the management and auditors etc.

13. OBJECTIVE
Auditor’s Objective is to accept or continue an audit engagement only when the
basis upon which it is to be performed has been agreed, through
1.
Ensuring if the
Preconditions for
an audit are
present
2.
Confirming if there
is a common
understanding
between auditor
and management

16. 3. SA 220: QUALITY
CONTROL FOR AN
AUDIT OF FINANCIAL
STATEMENTS

17. OVERVIEW

18. ETHICAL REQUIREMENTS AND ENGAGEMENT TEAM

19. DOCUMENTATION IN REGARD TO QUALITY CONTROL

20. MONITORING OF PERFORMANCE

21. 4. SA 300
PLANNING AN AUDIT
OF FINANCIAL
STATEMENTS

22. OVERVIEW
SA 300 deals with the auditor’s responsibility
towards planning for an audit of financial
statements and its context is focused more on a
recurring audit. This standard also prescribes
the additional considerations required for an
initial audit engagement.

23. OBJECTIVE
The objective is to plan the audit in accordance
with the size and complexity of the entity to
perform the audit in an effective
manner. Partner and key members of the
engagement team are required to be involved in
the audit planning through discussion which will
enhance the audit effectiveness and efficiency.

25. DOCUMENTATION
i. Overall audit
strategy which
exhibits the key
decision of the
audit planning
ii. Audit Plan
which includes
standard audit
program and
audit completion
checklist
iii. Any significant
changes made
during the audit
engagement to
the above and
the reasons for
the same

26. 5. SA 299 (REVISED):
JOINT AUDIT OF
FINANCIAL
STATEMENTS

28. OBJECTIVES
● To lay down broad principles for the joint auditors in conducting the joint
audit.
● To provide a uniform approach to the process of joint audit.
● To identify the distinct areas of work and coverage thereof by each joint
auditor.
● To identify individual responsibility and joint responsibility of the joint
auditors in relation to audit.

30. 6. SA 315:
IDENTIFYING AND ASSESSING
THE RISK OF MATERIAL
MISSTATEMENT THROUGH
UNDERSTANDING THE ENTITY
AND ITS ENVIRONMENT

31. OVERVIEW
SA 315 deals with the responsibility of
auditor in identifying and assessing the
risk of material misstatement through
understanding the entity and its
environment

32. OBJECTIVE
The objective of the auditor is to identify and
assess the risk of material misstatement in
an entity’s financial statement and
implement appropriate responses (Refer
SA 330) & procedures which will reduce
such risk to an acceptably low level.

33. ENTITY’S ENVIRONMENT

34. ENTITY’S INTERNAL CONTROL

35. INFORMATION SYSTEM ACTIVITIES

36. 7. SA 330:
Auditor’s Responses
To Assessed Risk

37. OVERVIEW
SA 330 deals with the auditor’s responsibility
to design and implement responses to the
assessed risk of material misstatement
identified in accordance with SA 315.

38. OBJECTIVE
To obtain sufficient appropriate audit
evidence about the assessed risk and
design & implement appropriate responses
to those risk SA 330 is effective for the
audit of financial statements for periods
beginning on or after 1st April 2008

39. AUDIT PROCEDURES
Nature, timing and the extent of the audit procedures are to be based on and
are responsive to the assessed risk of material misstatement at the assertion
level. Consider the reason for the assessment given to each class of
transaction, account balance and disclosure including:
i. Likelihood of material misstatement due to the particular characteristics of
relevant inherent risk
ii. Whether the risk assessment takes into account the relevant controls

40. SUFFICIENCY AND APPROPRIATENESS OF AUDIT EVIDENCE

41. 8. SA 600 :
USING THE WORK
OF ANOTHER
AUDITOR

42. INTRODUCTION

43. ACCEPTANCE AS PRINCIPAL AUDITOR
Auditor to decide whether the auditor’s own participation is sufficient to be
able to act as the principal auditor with the following consideration:
i. The materiality of the portion of the financial information
ii. The degree of knowledge regarding the business of the components
iii. Risk of material misstatements of the components audited by the other
auditor
iv. Performance of audit procedures per this SA regarding the components
audited by the other auditor in which the principal auditor has significant
participation

44. CO-ORDINATION BETWEEN THE AUDITORS
A. There should be sufficient liaison (through written communication)
between the principal auditor and other auditors
B. Other auditors should coordinate with the principal auditor knowing the
context in which the work to be used
C. The principal auditor should advise the other auditor of any relevant
matters that comes to principal auditor’s attention
D. The principal auditor may require the other auditor to answer detailed
questionnaire required for discharging duties
E. Another auditor has to respond to such questionnaires on a timely basis

45. 9. SA 450:
Evaluation of
Misstatement Identified
During the Audit

46. SCOPE
SA 450 Evaluation of Misstatement Identified During the Audit deals with the
auditor’s responsibility to evaluate the effect of identified misstatements and
uncorrected misstatements. SA 700 (Forming an opinion and reporting on
financial statements) takes into account the evaluation of uncorrected
misstatements for auditor’s conclusion
SA 450 is effective for the audit of financial statements for periods beginning
on or after 1st April 2010

47. AUDITOR’S COMMUNICATION & CORRECTION OF
MISSTATEMENTS
▪ Communicate on a timely basis to the appropriate level
of management (unless prohibited by law or regulation)
▪ Request management to correct those misstatements
▪ If management refuses to correct misstatements, the
auditor should understand the reason for the same
▪ Based on the understanding auditor should evaluate
whether the financial statements as a whole are from
material misstatements.

48. EFFECT OF UNCORRECTED MISSTATEMENTS
Before evaluating the effect of uncorrected misstatements, the auditor should
reassess materiality per SA 320 to confirm whether it remains appropriate to
the entity’s financial results by taking into account:
a. Size and Nature of the misstatements both in relation to particular
classes of transactions account balance or disclosures etc and circumstance
of their occurrence
b. Effect of uncorrected misstatements related to prior periods on the
relevant classes of transactions, account balance or disclosure, and the
financial statements as a whole

49. EXAMPLE- MISSTATEMENT
A. Sales income of a company is materially overstated, then financial statement
as a whole will be materially misstated
B. Misclassification between balance sheet items may not be considered material
if the amount of misclassification is small compared to other balance sheet
items and it does not affect the P&L or key ratios

50. 10. SA 620 :
USING THE WORK
OF AN AUDITOR’S
EXPERT

51. INTRODUCTION

52. DEFINITION
● Auditor’s Expert – “An individual or organization possessing
expertise in a field other than accounting or auditing, whose work in
that field is used by the auditor to assist the auditor in obtaining
sufficient appropriate audit evidence. An auditor’s expert may be the
auditor’s internal expert or an external expert.
● Management Expert – “An individual or organization possessing
expertise in a field other than accounting or auditing, whose work in
that field is used by the entity to assist the entity in preparing the
financial statements.

53. REFERENCE TO THE AUDITOR’S EXPERT IN THE AUDITOR’S
REPORT
Reference to the auditor’s expert work should not be made in an auditor’s
report containing an unmodified opinion unless required by law or
regulation. If such reference is-
i. Required by law or regulation or
ii. Relevant to an understanding of a modification to the auditor’s opinion, then
The auditor should indicate in the auditor’s report that the references do not
reduce the auditor’s responsibility for the audit opinion

54. EXAMPLE
● Valuation of complex financial instruments, land &
buildings, machinery, intangible assets, impaired assets
etc
● II. Estimation of oil and gas reserves, actuarial
calculation of liabilities etc
● III. Valuation of environmental liabilities, site clean-up
cost,
● IV. Interpretation of law, contracts, and regulation