You are on page 1of 7

A & BC

L.BHARGAV

128-09-00954 B.COM REGULARS

Auditing Standards
The Auditing Practices Committee (re-christened as Auditing and Assurance Standards Board) was constituted in September, 1982 as one the important technical committtes of the ICAI on the lines of the standard setting procedure prevalent abroad. The composition of the Board had been broad based giving representations to RBI, SEBI, CII and Management Institute. The primary objective of the Board, as set out in the Preface to the Statements on Standard Auditing Practices (now renamed as Audint and Assurance Standards), is to review the existing Auditing Practices in India and to formulate the Statements on Standard Auditing Practices which turn are issued under the authority of the Council. While formulating the auditing standards the Board tries to integrate, to the extent possible, the provisions of the International Standards on Auditing issued by the International Federation of Accountants in the light of the conditions and practices prevailing in India . The Board also issues clarifications, Guidance Notes etc. on matters relating to auditing. During the year under report, the Board issued three indusry specific Guidance Notes for the benefit of the members, viz., Guidance Note on Audit of Companies Carrying on General Insurance Business (Revised), Guidance Note on Audit of Companies Carrying on Life Insurance Business and Guidance Note on Audit of Accounts of Members of Stock Exchanges (Revised). These Guidance Notes were issued in collaboration with the Committee on Insurance and the Committee on Financial Markets and Investor's Protection respectively. The Guidance Note on Audit of Expenses and Guidance Note on Engaements to Perform Agreed upon Procedures were also released during the year. The Statement on Standard Auditing Practices (SAP) 23 on

related Parties and the Statement on Standard Auditing Practices (SAP) 24 ON Audit Considerations relating to Entitites Using Service Organisations were also issued during the year. During the year, the Board issued the format of the Auditor's Report on Consolidated Financial Statements pursuant to the issuance of the Accounting Standard (AS) 21 on Consolidated Financial Statements. As a major step towards bringing the reporting practices in India at par with the international practices and also as an attempt to bridge the "Expectation Gap", the Board revised the format of the auditor's report on financial statements issued in 1958. The revised format clearly brings out, inter alia, the responsibility of the management vis a vis the auditor as regards the financial statements, the scope of an audit, the basis of the opinion expressed by the auditor. The revised formar evoked positive response from all sections of the society. The Board is also in the process of formulation Statement on Standard Auditing Practices on Auditor's Report on Financial Statements. The Statement on Standard Auditing Practices on Risk Assessments and Internal Control has been issued as revised SAP 6. The Board, pursuant to the issuance of the Accounting Standard (AS) 26 ON Impairment of Assets, is in the process revising the Guidance Note on Audit of Miscellaneous Expenditure shown in the Balance Sheet. The Statement on Standard Auditing Practices (SAP) 10 on Using the Work of Another Auditor was published in the July, 2002 issue of the Journal. The Board also issued the Exposure Draft of the proposed SAP on Comparatives in July, 2002. A ICAI Handbook 2002 on Auditing Pronouncements comprising of two volumes, as on July 1, 2002 - Volument I of the Handbook containing the text of all the Guidance Notes on matters relating to auditing, which are generic in nature is in the process of release. A CD containing the aforesaid will also be given free of cost along with the said Handbok. The Board is also working to bring out Statements on Standard Auditing Practices and Guidance Notes

corresponding to the International Standards on Auditing and the International Auditing Practices Statements, issued by the International Federation of Accountants. During the year, the Board also interacted with the Reserv Bank of India and other governmental and regulatory bodies. In August, 2001, a crisp comparative position of the Indian Accounting Standards vis-a-vis International Accounting Standards and US GAAP was brought out by way of publication title "A comparative Study of Accounting Standards - Indian GAAP, IAS & US GAAP" for providing an upto date reference material to the various useres of the financial statements. This publication was revised later taking into account the subsequent Indian Accounting Standards issued. A sizeable number of background materials have been brought for the seminars and conferences held all over India relating to Accounting Standards and its implications, International Accounting Standards and US GAAP'S Accounting aspects of Disaster Management, etc.

Auditing, Review and Other Standards (formerly known as AAS) Standards on Quality Control (SQCs)

SQC 1, Quality Control for Firms that Perform Audit and Reviews of Historical Financial Information, and other Assurance and Related Services Engagements Announcement on Amendment to SQC 1 - Retention Period for Engagement Documentation (Working Papers)

Audits and Reviews of Historical Financial Information New/Revised Standards (Auditing, Review and Others) issued under the Clarity Project

100-199 Introductory Matters 200-299 General Principles and Responsibilities SA 200 (Revised) issued under the Clarity Project, Overall Objectives of the Independent

Auditor and the Conduct of an Audit in Accordance with Standards on Auditing SA 210 (Revised) under the Clarity Project, Agreeing the Terms of Audit Engagements SA 220 (Revised)issued under the Clarity Project , Quality Control for an Audit of Financial Statements SA 230 (Revised) under the Clarity Project, Audit Documentation SA 240 (Revised) under the Clarity Project, The Auditors Responsibilities Relating to Fraud in an Audit of Financial Statements SA 250 (Revised) under the Clarity Project, Consideration of Laws and Regulations in an Audit of Financial Statements SA 260 (Revised) under the Clarity Project, Communication with Those Charged with Governance SA 265 issued under the Clarity Project, Communicating Deficiencies in Internal Control to Those Charged With Governance and Management SA 299 (AAS 12), Responsibility of Joint Auditors 300-499 Risk Assessment and Response to Assessed Risks SA 300 (Revised) under the Clarity Project, Planning an Audit of Financial Statements SA 315 under the Clarity Project, Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and Its Environment SA 320 (Revised) issued under the Clarity Project, Materiality in Planning and Performing an Audit SA 330 under the Clarity Project, The Auditors Responses to Assessed Risks SA 402 (Revised) issued under the Clarity Project, Audit Considerations Relating to an Entity Using a Service Organisation

SA 450 issued under the Clarity Project, Evaluation of Misstatements Identified During the Audit 500-599 Audit Evidence SA 500 (Revised) under the Clarity Project, Audit Evidence SA 501 (Revised)issued under the Clarity Project, Audit EvidenceSpecific Considerations for Selected Items SA 505 (Revised) issued under the Clarity Project, External Confirmations SA 510 (Revised) under the Clarity Project, Initial Audit Engagements Opening Balances SA 520 (Revised) issued under the Clarity Project, Analytical Procedures SA 530 (Revised) under the Clarity Project, Audit Sampling SA 540 (Revised) under the Clarity Project, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures SA 550 (Revised) under the Clarity Project, Related Parties SA 560 (Revised) under the Clarity Project, Subsequent Events SA 570 (Revised) under the Clarity Project, Going Concern SA 580 (Revised) under the Clarity Project, Written Representations 600-699 Using Work of Others SA 600 (AAS 10), Using the Work of Another Auditor SA 610 (Revised) issued under the Clarity Project, Using The Work of Internal Auditors SA 620 (Revised) issued under the Clarity Project, Using the Work of an Auditors Expert 700-799 Audit Conclusions and Reporting SA 700 (Revised) issued under the Clarity Project, Forming an Opinion and Reporting on Financial Statements

SA 705 issued under the Clarity Project, Modifications to the Opinion in the Independent Auditors Report" SA 706 issued under the Clarity Project, Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditors Report" SA 710 (Revised) issued under the Clarity Project, Comparative Information Corresponding Figures and Comparative Financial Statements SA 720 under the Clarity Project, The Auditors Responsibility in Relation to Other Information in Documents Containing Audited Financial Statements 800-899 Specialized Areas SA 800 issued under the Clarity Project, Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks SA 805 issued under the Clarity Project, Special Considerations Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement SA 810 issued under the Clarity Project, Engagements to Report on Summary Financial Statements 2000-2699 Standards on Review Engagements (SREs) SRE 2400 (Revised), Engagements to Review Financial Statements SRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity

Assurance Engagements Other Than Audits or Reviews of Historical Financial Information


3000-3699 Standards on Assurance Engagements (SAEs) 3000-3399 Applicable to All Assurance Engagements 3400-3699 Subject Specific Standards SAE 3400 (AAS 35), The Examination of Prospective Financial Information

Related Services

4000-4699 Standards on Related Services (SRSs) SRS 4400 (AAS 32), Engagements to Perform Agreed-upon Procedures Regarding Financial Information SRS 4410 (AAS 31), Engagements to Compile Financial Information

General Clarifications issued


General Clarification (GC)-AASB/2/2004 on SA 210 General Clarification (GC)-AASB/1/2002 on SA 620