recent developments in auditing standards n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Recent Developments in Auditing Standards PowerPoint Presentation
Download Presentation
Recent Developments in Auditing Standards

Loading in 2 Seconds...

play fullscreen
1 / 36

Recent Developments in Auditing Standards - PowerPoint PPT Presentation


  • 173 Views
  • Uploaded on

Recent Developments in Auditing Standards. CA. Harinderjit Singh, May 7,2011 NIRC - Delhi. Agenda. Understanding Audit in the current environment Convergence with ISAs Focus Of New /Revised Standards Way Forward. 1. Understanding Audit in the current environment.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

Recent Developments in Auditing Standards


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
    Presentation Transcript
    1. Recent Developments in Auditing Standards CA. Harinderjit Singh, May 7,2011 NIRC - Delhi

    2. Agenda • Understanding Audit in the current environment • Convergence with ISAs • Focus Of New /Revised Standards • Way Forward Recent Developments in Auditing Standards

    3. 1. Understanding Audit in the current environment Recent Developments in Auditing Standards

    4. Changing Business Environment • Complex Business Structures • Fair Valuation • Estimates • Downturn • Information Technology

    5. Increasing Role of Regulators • CA Act • Disciplinary Mechanism • PRB, FRRB, QRB • Audit Liability • MCA, SEBI ,RBI, IRDA etc

    6. Not an investigator…

    7. Inherent Limitations of Audit REASONABLEASSURANCE ABSOLUTE ASSURANCE NOT POSSIBLE Recent Developments in Auditing Standards

    8. Independent Examination Financial Information Entity Expression of Opinion What is an Audit?? Reasonable ASSURANCE Recent Developments in Auditing Standards

    9. Overall Objectives of the Auditor That financial statements are free from material misstatement (due to fraud or error) Obtain reasonable assurance Whether the financial statements are in accordance with the applicable Financial Reporting Framework Express an opinion on The auditor’s findings - as required by the Standards on Auditing Report on the financial statements and communicate Recent Developments in Auditing Standards

    10. Bridging the ‘Expectation gap’-Audit a profession at RISK Expected standard of performance Actual Standard of performance Expectation gap • Reporting of Fraud • Inherent Limitation • of Audit & Audit Report Requirement gap Feasibility gap Standards Gap CONVERGENCE: To reduce gap Performance gap Existing Standard & Statues Global Standards of performance Recent Developments in Auditing Standards

    11. 2. Convergence with ISAs Recent Developments in Auditing Standards

    12. Need for Convergence

    13. Issues in Convergence

    14. IAASB Clarity Project • Initiated in 2004, completed March 2009 • Objective: • Improve clarity of ISAs • Increase ease of implementation • Has issued complete suite of new/ revised ISAs • AASB Clarity Project initiated in 2007 (Prior to this, till March 2007, AASB had issued 35 Auditing Standards) Recent Developments in Auditing Standards

    15. IAASB Clarity Project: Some Important Changes • Nomenclature AASs done away with • Different Categories of standards • Standard on Quality Control (SQC) 1 • Renumbering/ re-categorisation as per IAASB format • Differences from ISAs given as “Material Modifications to ISAs in SAs” Recent Developments in Auditing Standards

    16. Standards Issued by AASB SQC SQCs SQCs SQCs

    17. Structure of Standards issued by AASB (Effective from 1st April’08)) Chartered Accountants Act, 1949, Code of Ethics and other relevant pronouncements of the ICAI STANDARDS • Quality Control (SQC1) • Engagements: Standards on – • Auditing (100-999) • Review (2000-2699) • Assurance (3000-3699) • Related Services (4000-4699) Historical Prospective AUP & Compilation Recent Developments in Auditing Standards

    18. Nature of Services and Level of Assurance ------ Related Services------- Auditing Nature of Service Audit Review Agreed upon Procedures Compilation Comparative level of Assurance provided by the auditor High, but not absolute assurance (Reasonable) Moderate Assurance (Limited) No Assurance No Assurance Report Provided Positive Assurance on assertion(s) Negative Assurance on assertion(s) Factual findings of procedures Identification of information compiled Recent Developments in Auditing Standards

    19. 8 Standards: SA 200, SA 210, SA 220, SA 230, SA 240, SA 250, SA 260, SA 265 6 Standards: SA 300, SA 315, SA 320, SA 330, SA 402, SA 450 11 Standards: SA 500, SA 501, SA 505, SA 510, SA 520, SA 530, SA 540, SA 550, SA 560, SA 570, SA 580 3 Standards: SA 600, SA 610, SA 620 5 Standards: SA 700, SA 705, SA 706, SA 710, SA 720 3 Standards: SA 800, SA 805, SA 810 Recent Developments in Auditing Standards

    20. Applicability of the New/Revised Standards Recent Developments in Auditing Standards

    21. New Format of SAs - IAASB Clarity Convention SA Section I Requirements section Section II Application Material • Objective • Introductory • Definitions • Requirements • Represented by use of • SHALL • Explanatory guidance • Appendices • Application material & Appendix integral part of SA but do not impose requirement • Audit of SMEs • IT is part of the standards Recent Developments in Auditing Standards

    22. Focus Of New/ Revised Standards-5 Elements- • A three party relationship-a practitioner, a responsible party, and intended users • A subject matter-Financial or Non Financial • Criteria-AS or internal control Frame work • Evidence–Sufficient, Skepticism, NTE, materiality, quality, quantity, risk • Assurance report-reasonable,limited, scope limitation, qualified

    23. Revised Framework (Effective from 1st April 2008) • ETHICAL PRINCIPLES & Quality Control • Definition and Objective of an Assurance Engagement. • Scope-not all engagements are assurance. • Engagement acceptanceonly on fulfillment of certain conditions-Ethical ,Independence

    24. Focus OF New/Revised Stds • Professional Judgement • Scalability of Standards Recent Developments in Auditing Standards

    25. 5 Elements-Assurance engagement • A three party relationship-a practitioner, a responsible party, and intended users • A subject matter-Financial or Non Financial • Criteria-AS or internal control Frame work • Evidence–Sufficient, Skepticism, NTE, materiality, quality, quantity, risk • Assurance report-reasonable,limited, scope limitation, qualified

    26. Focus of New/revised Standards • Materiality - planning and performing an audit • Risk assessment - audit evidence, in relation to: • Related party relationships and transactions • Accounting estimates (including FV a/cing estimates) and related disclosures • An entity’s use of a service organization • Fraud • Internal control Recent Developments in Auditing Standards

    27. Focus of New/revised Stds • Audit evidence considerations in relation to: • External confirmations • Written representations (including implications for engagement acceptance considerations) • Using the work of others, in relation to: • Audits of group FS, (work of component auditors) • Work of an auditor’s expert • Communication with those charged with governance • 2 way communication • All relevant matter Recent Developments in Auditing Standards

    28. Focus of New/ Revised Standards • Communicating deficiencies in internal control • Auditor reporting, in relation to: • Modifications to the auditor’s opinion • Emphasis of Matter paragraphs • Format • Documentation Recent Developments in Auditing Standards

    29. SA 230: Documentation-Nature & Purpose Evidence of basis for conclusion re achievement of overall objectives Evidence of audit planning & performance as per SAs & L&R

    30. 4. Way forward Recent Developments in Auditing Standards

    31. Recent Developments in Auditing Standards

    32. Publications Recent Developments in Auditing Standards

    33. Other AASB Publications • A Study on Money Laundering • Technical Guide on Audit of Telecom Industry (Specific Aspects) • Technical Guide on E-Commerce- Considerations for Audit of Financial Statements • Implementation Guide to Risk-based Audit of Financial Statements • Convergence with the International Standards of the IAASB – Position Paper and Work Plan Recent Developments in Auditing Standards

    34. Training and Awareness • CPE programmes • Audit Conclave • Full day seminars • Work Shop • Teleconference Programme Recent Developments in Auditing Standards

    35. THANK YOU! Be courageous and confident… Take personal ownership… Bring a ‘can do’ attitude! Recent Developments in Auditing Standards