Chapter 5

Auditing and Assurance

Standards

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
1
 Agenda

1. Hong Kong Auditing Standards

2. Hong Kong Standards on Auditing (HKSAs)
3. Standards other than HKSAs
4. Practice Notes and Auditing Guidelines
5. Auditing and Assurance Bulletins

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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 1. Hong Kong Auditing Standards

• Complete set of HK Auditing Standard includes:

Ø HK Standards on Quality Management (HKSQMs), or HK Standards
on Quality Control (HKSQCs) up to 15 December 2022
Ø HK Framework for Assurance Engagements
Ø HK Engagement Standards, which include:
– HK Standards on Auditing (HKSAs) (HKSAs100-999)

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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 1. Hong Kong Auditing Standards
• Complete set of HK Auditing Standard includes:
Ø HK Engagement Standards, which include:
– HK Standards on Review Engagements (HKSREs)
– E.g. Review of Interim Financial Information (HKSRE 2410)
– HK Standards on Assurance Engagements (HKSAEs)
– E.g. reports on controls at a service organization, greenhouse gas
statements, etc.
– HK Standards on Investment Circular Reporting Engagements
(HKSIRs)
– E.g. HKSIR 200, 400, 500 profit forecast, statements of sufficiency
of working capital and statements of indebtedness, comfort letter,
etc
– HK Standards on Related Services (HKSRSs)
– E.g. Agreed-upon procedures engagements

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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 1. Hong Kong Auditing Standards
Hong Kong Standards on Quality Management (HKSQM),
or HK Standards on Quality Control (HKSQCs) up to 15 December 2022

Hong Kong Framework for Assurance Engagements

Audits and Reviews of Other

Related
Historical Financial Assurance
Services
Information Engagements

HK Standards
HK Standards HK Standards HK Standards
HK Standards on Inv. Circular
on Review on Assurance on Related
on Auditing Reporting
Engagements Engagements Services
(HKSAs) Engagements
(HKSRE) (HKSAEs) (HKSRSs)
(HKSIRs)

HKAPGs, HKREPGs, HKAEPGs, HKRSPGs,

Practice Notes and Auditing Guidelines Auditing and Assurance Technical Bulletins,
Circulars and staff publications
© Peter T. Y. Lau and Nelson C. Y. Lam
© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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 1. Hong Kong Auditing Standards

• The HKICPA members must comply with the Hong Kong

Auditing Standards.
• Apparent failure by the HKICPA members to comply with
Hong Kong Auditing Standards may be inquired into by the
appropriate committee of the HKICPA and may lead to
disciplinary action, including withdrawing the CPA’s
practising certificate.
• Moreover, the courts will consider compliance with the Hong
Kong Auditing Standards in negligence cases against the
auditors.

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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 2. Hong Kong Standards on Auditing

• The HKSAs deal with the general responsibilities of the

auditor, as well as the auditor’s further considerations
relevant to the application of those responsibilities to
specific topics.
• An HKSA normally contains:
Ø Introductory material,
Ø Objectives,
Ø Definitions,
Ø Requirements, and
Ø Application and other explanatory material.
Ø Example of procedures (not intended to impose a requirement)

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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 3. Standards other than HKSAs

• Standards other than HKSAs, including HKSREs, HKSAEs,

HKSIRs and HKSRSs, contain:
Ø Basic principles and essential procedures (identified in bold type
lettering and by the word “should”) together with related guidance in
the form of explanatory and other material, including appendices.

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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 4. Practice Notes and Auditing Guidelines

• The HKICPA also issues

Ø Practice Notes (PNs) and
Ø Auditing Guidelines (AGs)
to provide interpretative guidance and practical assistance
to its members in implementing Hong Kong Engagement
Standards and to promote good practice.

• PNs and AGs can be local guidance developed by the

HKICPA in response to emerging regulatory issues or new
reporting requirements, or guidance adopting Practice
Statements (PSs) issued by the IAASB.

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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 5. Auditing and Assurance Bulletins

• The HKICPA also issues Auditing and Assurance Bulletins

and Auditing Bulletins.
Ø They are informative publications issued by the AASC on subjects
of topical interest and are intended to assist members or to
stimulate debate on auditing and assurance issues.
Ø They do not require the approval of the HKICPA’s Council and do
not have the same authority as Hong Kong Auditing Standards.

© Peter T. Y. Lau and Nelson C. Y. Lam

© Pilot Publishing Co. Ltd. 2021 Auditing and Assurance in Hong Kong
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