08.

Philippine Standards on Auditing

Answer the following questions:

1. Is it possible for an auditor to depart from PSA? What would be the implication if an
auditor does not follow the applicable PSA? What would be the implication if an
auditor does not follow the applicable PSA?
- Yes. According to Par. 10 of the preface to Philippine Standards on auditing
related to services, “an auditor may, in exceptional circumstances, judge it
necessary to depart from a PSA in order to more effectively achieve the objective
of an audit. When such situation arises, the auditor should be prepared to justify
the departure.”
2. Are PSAs and PAPs synonymous? Explain your answer.
- No. According to Par. 14 of the preface to Philippine Standards on auditing
related to services, “PAPs are issued to provide practical assistance to auditors
in implementing PSAs to promote and practice. These statements are not
intended to have the authority of the PSA.
3. What is meant by assurance?
- Assurance services are audit activities that provide an independent, objective
assessment of financial statements or compliance efforts. These compliance,
regulatory, and financial statement audits are all considered assurance services.
4. How can an auditor provide such assurance?
- The objectives of these audits are to assure management, the Board, and
regulators that financial statements are accurate and operations are done in
accordance with applicable policies and regulations
5. Under PSA 120, Framework of PSA, auditing services are distinguished from
related services such as review, compilations, agreed-upon procedures. Discuss
the levels of assurance provided by the CPA in each of these services.
- The turn of opinion expressed by the auditor will depend upon the applicable
financial reporting framework and any applicable laws of regulation
- This is effective for audits of financial statements for periods beginning on or
after December 15, 2009.