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Overview of
Assurance Standards &
Documentation
LUNAWAT & CO.Chartered AccountantsLUNAWAT & CO.Chartered Accountants CA. PRAMOD JAIN
FCA, FCS, FCMA, LL.B, MIMA, DISA
CA. PRAMOD JAINFCA, FCS, FCMA, LL.B, MIMA, DISA17th September 201417th September 2014
Applicability
� Every CA performing assurance practice have to comply with Technical Standards
� Audit & Assurance Standards are also Technical Standards
�With effect from 1stApril 2008 Auditing and Assurance Standards (AAS) have been re-classified
� Gets a legal backing by Companies Act 2013
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Companies Act 2013
� 2 (7) - “Auditing Standards” means the standards of auditing or any addendum thereto for companies or class of companies referred to in s. 143 (10)
� 132(1)(a) – NFRA to recommend to CG –◦ auditing policies and standards for adoption by companies or class of companies or their auditors, as the case may be.
◦ to monitor and enforce these standards
◦ oversee the quality of service of the professions associated with ensuring compliance with such standards
� 143(2)-Auditor to ensure compliance while issuing report
� 143(9) - Auditor to comply with the auditing standards
� 143(10) – CG to prescribe SAs – till notification ICAI
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No. of Standards
Type of Standards Numerical Series
No. of Standard
Standards on Quality Control (SQC)
01-99 1
Standards on Auditing (SA) 100-999 37
Standards on Review Engagements (SRE)
2000-2699 2
Standards on Assurance Engagements (SAE)
3000-3699 2
Standards on Related Services (SRS)
4000-4699 2
Standards on Internal Audit (SIA)
18
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Standards on Auditing
SA. No.
Sub-division No.
100-199 Introductory Matters 0
200-299 General Principles & Responsibilities 9
300-499 Risk Assessment and Response to Assessed Risks
6
500-599 Audit Evidence 11
600-699 Using Work of Others 3
700-799 Audit Conclusions and Reporting 5
800-899 Specialized Areas 3
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General Principles & Responsibilities
SA. No.
Sub-division
200 Overall Objectives of the Independent Auditor and the Conduct of
an Audit in Accordance with Standards on Auditing
210 Agreeing the terms of Audit Engagement
220 Quality Control for an Audit of Financial Statements
230 Audit Documentation
240 The Auditor’s Responsibility to consider Fraud in an Audit of
Financial Statements
250 Consideration of Laws and regulations in an Audit of Financial
Statements
260 Communications with Those Charged with Governance
265 Communicating Deficiencies in Internal Control
299 Responsibility of Joint auditors
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Risk Assessment & Response to Assessed Risks
SA. No.
Sub-division
300 Planning an Audit of Financial Statements
315 Identifying and assessing the Risks of Material
Misstatement through understanding the entity and its
Environment
320 Materiality in Planning and Performing an Audit
330 The Auditor’s Response to Assessed Risks
402 Audit consideration relating to entities using Service
Organisations
450 Evaluation of Misstatements identified during the
Audit
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Audit Evidence
SA. No.
Sub-division
500 Audit Evidence
501 Audit Evidence – Specific Considerations for
Selected Items
505 External Confirmations
510 Initial Engagements – Opening Balances
520 Analytical Procedures
530 Audit Sampling
540 Auditing accounting estimates, including Fair
Value Accounting estimates, and related
disclosures
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Audit Evidence
SA. No.
Sub-division
550 Related Parties
560 Subsequent Events
570 Going Concern
580 Written Representations
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Using Work of Others
SA. No.
Sub-division
600 Using the Work of Another Auditor
610 Using the Work of Internal Auditors
620 Using the Work of an Auditor’s Expert
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AUDIT CONCLUSIONS AND REPORTING
SA. No.
Sub-division
700 Forming an Opinion and Reporting on Financial
Statements
705 Modifications to the Opinion in the Independent
Auditor’s Report
706 Emphasis of Matter Paragraphs and Other Matter
Paragraphs in the Independent Auditor
710 Comparative Information—Corresponding Figures
and Comparative Financial Statements
720 The Auditor’s Responsibility in relation to other
information in Documents containing Audited
Financial Statements
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SPECIALIZED AREAS
SA. No.
Sub-division
800 Audits of Financial Statements Prepared in
Accordance with Special Purpose
Framework
805 Special Considerations—Audits of Single
Financial Statements and Specific
Elements, Accounts or Items of a Financial
Statement
810 Engagements to Report on Summary
Financial Statements
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Standards on Review Engagements
SRE No.
Sub-division
2400 Engagements to Review Financial Statements
2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity
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Standards on Assurance Engagements
SRE No.
Sub-division
3400 The Examination of Prospective Financial Information
3402 Assurance Reports on Controls At a Service Organisation
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Standards on Related Services
SRE No.
Sub-division
4400 Engagements to Perform Agreed-upon Procedures regarding Financial Information
4410 Engagements to Compile Financial Information
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Standards on Internal Audit
SIA No. Standard
1 Planning an Internal Audit
2 Basic Principles Governing Internal Audit
3 Documentation
4 Reporting
5 Sampling
6 Analytical Procedures
7 Quality Assurance in Internal Audit
8 Terms of Internal Audit Engagement
9 Communication with Management
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Standards on Internal AuditS No. Standard
10 Internal Audit Evidence
11 Consideration of Fraud in an Internal Audit
12 Internal Control Evaluation
13 Enterprise Risk Management
14 Internal Audit in an Information Technology Environment
15 Knowledge of the Entity & its Environment
16 Using the Work of an Expert
17 Consideration of Laws and Regulations in an Internal Audit
18 Related Parties
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SQC� Only 1 - Quality control for Firms that perform Audits and Reviews of Historical Financial Information, & Other Assurance and related Services Engagements
� Mandatory - For all engagements relating to accounting periods beginning on/after1.4.09
� Objective -To provide guidance regarding a firm’s responsibilities for its system of quality control for:◦ Audits of historical financial information ◦ Reviews of historical financial information◦ For other assurance◦ For related services engagements
� Peer Review after 1.4.2014
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QC to Include Policies for
� Leadership responsibilities for quality within the firm
� Ethical requirements
� Acceptance and continuance of client relationship and specific engagements
� Human resources
� Engagement performance
� Monitoring
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Code of Conduct
� Integrity
� Independency
� Objectivity
� Professional competence and due care
� Confidentiality
� Professional behaviour
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SA-230 - Documentation
In today’s scenario, where the quality of audit and assurance work is getting increasingly questioned and auditors are being called to
justify their opinion,
adequate documentation
is the only way for an
auditor to substantiate that he was
not negligent
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Maintenance of Professional Skills and Standards
� Staff Supervision and Development Policy
� Guidelines for Maintenance of Professional Skills and Standards
� Policy Regarding Considering of Skill and Competence Before Assignment of Attestation Engagement
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Staff Supervision and Development
� Recruitment Policy
� Staff Appointment Letter
� Monthly Staff Performance Sheet
� Registers of Continuing Professional Education of firm’s Personnel.
� Register of In-house Continuing Professional Education.
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Independence Policies and its Communication
� Policy of Independence
� Register of Disclosure of Interest by Partners and Staff in Professional Assignments Handled by the Firm
� Policy Regarding Acceptance of An Engagement
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Outside Consultation
� Guidelines for Maintenance of Professional Skills and Standards.
� Procedure for Consultation
� Expert Consultants’ List
� Document whenever consultation is done as per the policy of the firm.
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Review and Evaluation of System of Internal Controls
� Knowledge of Client’s Business.
� Authorization Matrix
� Audit Program.
� List of documents a firm should obtain during Attestation Service Engagement – internal control policies.
� Risk Assessment Checklist.
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Substantive Tests
� Knowledge of Client’s Business.
� Audit Program.
� Materiality Planning
� Letter to be sent by Auditee to Bankers for External Confirmation Directly in Name of firm.
� Letter to be sent by Auditee to Parties for Balance Confirmation Directly in Name of firm.
� Letter to be sent by Auditee to Concerns with Whom Stocks of the Auditee are kept, and are to be confirmed.
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Audit Record Administration� Appointment Letter
� Audit Engagement letter.
� Engagement Initiation Letter.
� List of Documents a firm should obtain during Attestation Service Engagement.
� Audit Program.
� CARO Requirement Checklist.
� Risk Assessment Checklist.
� AS Verification checklist.
� Ratio Analysis Sheet.
� Overall Certificates.
� Representation letters.
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Financial Statements Presentation
� Compliance Overview of Accounting Standards for Corporate Enterprises by firm during Audit.
� Compliance Overview of Accounting Standards for Non-Corporate Enterprises by firm during Audit.
� List of documents a firm should obtain during Attestation Service Engagement.
� Overall Certificates
� Management representation letters
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Audit Conclusions and Reporting
� AS verification checklists
� List of documents a firm should obtain during Attestation Service Engagement.
� Overall Certificates
� CARO Requirement Checklist.
� Management representation letters.
� Signed final trial balance.
� Signed financial statements.
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Office Administration
� Code of Conduct
� Policies and Procedures for Recording and Monitoring of Incoming and Outgoing Documents.
� Policies for Attendance of Staff including Staff Going on Audits.
� Policies for Billing and Follow up.
� Policy of Retention of Client.
� Policies and Procedures for Disaster Recovery Plan (DRP) and Business Continuity Plan (BCP).
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Documentation
� Have checklists, tell articles to cross verify
� Seniors to cross verify
� Take necessary certificates / representation from management
� External Confirmations
� Comply with SAs
�Work not documented is work not done.
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