आशीवायद- Comprehensive Module For CA IPCC Auditing & Assurance AASB & Other Topics

Chapter 17 AASB & Other Topics

What are Standards on Auditing (SAs)?
SAs are Auditing Standards, which prescribe the way the auditing should be conducted.

Procedure for issuing SAs

Generally following procedure is followed for issuing the SAs :
Auditing and Assurance Standard Board (AASB) of the Institute of Chartered Accountants of
India (ICAI) determines the specific area in which the SAs need to be formulated.

In preparation of SAs—
AASB is assisted by study groups constituted to consider specific subjects.

An exposure draft of the proposed SA is finalized by the AASB' of ICAI on the basis of work of the
study group.

The exposure draft of the proposed SA is published for comments by the members of the Institute
(ICAI).

AASB finalizes the draft of the proposed SA after considering the comments received and submit
to the Council of the Institute (ICAI).

The Council considers the draft of the proposed SA and if necessary, modifies the same in
consultation with AASB. The SA is then issued under the authority of the Council of the Institute of
Chartered Accountants of India.

AASB of ICAI tries to integrate/harmonize the SAs to the extent possible in the light of the condition
and practices prevailing in India with ISAs (International Standards For Auditing) issued by IAASB
(International Auditing and Assurance Standards Board) of IFAC.

ICAI re-classified the existing auditing and assurance standards in 2008. The objective of re-classification is to converge
our existing auditing and assurance standards with International Standard on Auditing (ISA) issued by the International
Federation of Accountants (IFAC).

Question
Standards collectively known as the Engagements Standards issued by AASB under the authority of the council of ICAI - Discuss

The following Standards issued by the Auditing and Assurance Standards Board under the authority of the Council are
collectively known as the Engagement Standards:

Standards on Auditing (SAs), to be applied in the audit of historical financial information.

Standards on Review Engagement (SREs), to be applied in the review of historical financial

information.

Standards on Assurance Engagements (SAEs), to be applied in assurance engagements, dealing

with subject-matters other than historical financial information.

Standards on Related Services (SRSs), to be applied to engagements involving application of

agreed upon procedures to information, compilation engagements, and other related services
engagements as may be specified by the ICAI.

Standards on Quality Control (SQCs) issued by the AASB under the authority of the Council, are to
be applied for all services covered by the Engagement Standards as described above.

A diagram containing the structure of the Standards issued by the Auditing and Assurance Standards Board under the
authority of the Council is given as under.

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आशीवायद- Comprehensive Module For CA IPCC Auditing & Assurance AASB & Other Topics
Structure of Standards issued by the Auditing and Assurance Standards Board under the Authority of the Council of
ICAI

The Chartered Accountants Act, 1949, Code of Ethics and other relevant pronouncements of the ICAI

Standard on Quality Controls (SQCs)

Service covered by the pronuncemnet of the Auditing and

assurance board under the authority of the council of the ICAI

Assurance
Related Service
Services

Audit and Review of Assurance Engagements Framework for

historical financial other than audits or Assurance
information reviews of historical Engagement
financial informaiton
Standards on Standard on
Standard on Standards on
Auditing (SAs) Review
Assurance Related Services
100-999 Engagements
Engagement (SRSs) 4000-
(SREs) 2000- 4699
(SAEs) 3000-
2699
3699

Note: Only SAs from 200 to 720 are in CA Intermediate (IPC) syllabus, other SAs 800 to 810, SREs, SAEs and SRSs are not in
syllabus.

International Auditing and Assurance Standards Board (IASB)

(a) In 1977, the International Federation of Accountants (IFAC) was set up with a view to bring in harmony in the
profession of accounting on an international scale.
(b) In pursuing this mission, the IFAC Board has established the International Auditing and Assurance
Standards Board (IAASB) to develop and issue, high quality Auditing and Assurance Standards for use around
the world.
(c) The IAASB's pronouncement govern Audit, Review, Other Assurance and Related Services
Engagements that are conducted in accordance with International Standards. However, they do not override
the local laws or regulations that govern the audit of Historical Financial Statements, required to be
followed in accordance with that country's National Standards.
(d) The IAASB functions as an independent standard-setting body, which serves the objective of setting high
quality Auditing and Assurance Standards and by facilitating the convergence of International and National
Standards, thereby enhancing the quality & uniformity of practice throughout the world. IASSB achieves
this objective by -
Establishing high quality Auditing Standards and Guidance for Financial Statement audits, other
types of Assurance Services, Other Related Services, Quality Control areas,
Publishing Other pronouncements on Auditing and Assurance matters.

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आशीवायद- Comprehensive Module For CA IPCC Auditing & Assurance AASB & Other Topics
Auditing and Assurance Standards Board (AASB)

(a) ICAI is a member of IFAC and is committed to work towards the implementation of the guidelines issued by IFAC.
(b) ICAI constituted the Auditing Practices Committee (APC) in 1982. The main function of the APC is to review the existing
auditing practices in India and to develop Statements on Standard Auditing Practices (SAPs) so that these may be
issued by the Council of the Institute.
(c) While formulating the SAP's in India, the APC gives due consideration to the International Auditing Guidelines
issued by the IAPC and then tries to integrate them to the extent possible in the light of the conditions and practices
prevailing in India. While formulating the SAPs, the APC takes into consideration the applicable laws, customs,
usages and business environment in India.
(d) In July 2002, the APC has been converted into an Auditing and Assurance Standards Board (AASB) by the
Council of ICAI, to be in line with the international trend. The nomenclature of SAPs had also been changed to Auditing
and Assurance Standards (AASs).
(e) In 2007, the AASB issued several revised / new Standards pursuant to the IAASB Clarity Project, and henceforth
all the standards have been collectively called as "Standards on Auditing".

Objectives and Functions of the Auditing and Assurance

Standards Board
The following are the objectives and functions of the Auditing and Assurance Standards Board

(i) To review the existing and emerging auditing practices worldwide and identify areas in which Standards on Quality
Control, Engagement Standards and Statements on Auditing need to be developed.
(ii) To formulate Engagement Standards, Standards on Quality Control and Statements on Auditing so that these may
be issued under the authority of the Council of the Institute.
(iii) To review the existing Standards and Statements on Auditing to assess their relevance in the changed conditions
and to undertake their revision, if necessary.
(iv) To develop Guidance Notes on issues arising out of any Standard, auditing issues pertaining to any specific industry or on
generic issues, so that those may be issued under the authority of the Council of the Institute.
(v) To review the existing Guidance Notes to assess their relevance in the changed circumstances and to undertake their
revision, if necessary.
(vi) To formulate General Clarifications, where necessary, on issues arising from Standards.
(vii) To formulate and issue Technical Guides, Practice Manuals, Studies and other papers under its own authority for
guidance of professional accountants in the cases felt appropriate by the Board.

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