STANDARDS

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ENGAGEMENT AND QUALITY

CONTROL STANDARDS

CA ARUN KUMAR T
AN OVERVIEW
The following Standards issued under authority of ICAI Council are
collectively known as Engagement Standards: -

• Standards on auditing (SAs) which apply in audit of historical financial


information.

• Standards on review engagements (SREs) which apply in review of


historical financial information.

• Standards on Assurance engagements (SAEs) which apply in assurance


engagements other than audits and review of historical financial
information.

• Standards on Related Services (SRSs) which apply in agreed upon


procedures to information, compilation engagements and other related
service engagements.
Standards on Auditing

Standards on Auditing apply in the context of an


audit of financial statements by an independent
auditor. It is important to remember that
Standards on Auditing apply in audit of historical
information.
Standards on Review Engagements

Standards on review engagements apply in the


context of review of financial statements. It is to
be noted that both Standards on auditing and
Standards on review engagements apply to
engagements involving historical financial
information.
Standards on Assurance Engagements

There is another set of standards which apply in assurance


engagements dealing with subject matters other than
historical financial information. Such assurance engagements
do not include “audit“ or “review“ of historical financial
information. These standards are known as Standards on
Assurance Engagements. For example, an assurance
engagement relating to examination of prospective financial
information.
Standards on Related Services

Lastly, there are standards on related services. These


standards apply in engagements to perform agreed-upon
procedures regarding financial information.
Standards on Quality Control

Standards on Quality Control (SQCs) have been issued to


establish standards and provide guidance regarding a firm’s
responsibilities for its system of quality control for the
conduct of audit and review of historical financial
information and for other assurance and related service
engagements.
Why are Standards needed?
• Standards ensure carrying out of audit against established
benchmarks at par with global practices.

• Standards improve quality of financial reporting thereby


helping users to make diligent decisions.

• Standards promote uniformity as audit of financial


statements is carried out following these Standards.

• Standards equip professional accountants with


professional knowledge and skill.

• Standards ensure audit quality.


Duties in relation to Engagement
and Quality Control Standards
• It is the duty of professional accountants to see that
Standards are followed in engagements undertaken by
them.

• However, a situation may arise when a specific procedure as


required in Standards would be ineffective in a particular
engagement.

• In such a case, he is required to document how alternative


procedures performed achieve the purpose of required
procedure. Also, reason for departure has also to be
documented unless it is clear. Further, his report should
draw attention to such departures.
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

Standards on Auditing (SAs)

SA 200 Overall Objectives of the Independent Auditor and the Conduct


of an Audit in Accordance with Standards on Auditing

SA 210 Agreeing the Terms of Audit Engagements

SA 220 Quality Control for an Audit of Financial Statements

SA 230 Audit Documentation

SA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of


Financial Statements
SA 250 Consideration of Laws and Regulations in an Audit of Financial
Statements

SA 260 Communication with Those Charged with Governance

SA 265 Communicating Deficiencies in Internal Control to Those


Charged with Governance and Management.

SA 299 Joint Audit of Financial Statements

SA 300 Planning an Audit of Financial Statements

SA 315 Identifying and Assessing the Risks of Material Misstatement


Through Understanding the Entity and Its Environment

SA 320 Materiality in Planning and Performing an Audit

SA 330 The Auditor’s Responses to Assessed Risks


SA 402 Audit Considerations Relating to an Entity Using a Service
Organisation

SA 450 Evaluation of Misstatements Identified During the Audit

SA 500 Audit Evidence

SA 501 Audit Evidence-Specific Considerations for Selected Items

SA 505 External Confirmations

SA 510 Initial Audit Engagements – Opening Balances

SA 520 Analytical Procedures

SA 530 Audit Sampling

SA 540 Auditing Accounting Estimates, Including Fair Value Accounting


Estimates, and Related Disclosures
SA 550 Related Parties

SA 560 Subsequent Events

SA 570 Going Concern

SA 580 Written Representations

SA 600 Using the Work of Another Auditor

SA 610 Using the Work of Internal Auditors

SA 620 Using the Work of an Auditor’s Expert

SA 700 Forming an Opinion and Reporting on Financial Statements


SA 701 Communicating Key Audit Matters in the Independent Auditor’s
Report

SA 705 Modifications to the Opinion in the Independent Auditor’s


Report

SA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in


the Independent Auditor’s Report

SA 710 Comparative Information—Corresponding Figures and


Comparative Financial Statements

SA 720 The Auditor’s Responsibilities Relating to Other Information

SA 800 Special Considerations-Audits of Financial Statements Prepared


in Accordance with Special Purpose Frameworks
SA 805 Special Considerations-Audits of Single Financial Statements
and Specific Elements, Accounts or Items of a Financial
Statement

SA 810 Engagements to Report on Summary Financial Statements

Standards on Review Engagements (SREs)

SRE 2400 Engagements to Review Historical Financial Statements

SRE 2410 Review of Interim Financial Information Performed by the


Independent Auditor of the Entity
Standards on Assurance Engagements (SAEs)

SAE 3400 The Examination of Prospective Financial Information

SAE 3402 Assurance Reports on Controls At a Service Organisation

SAE 3420 Assurance Engagements to Report on the Compilation of Pro


Forma Financial Information Included in a Prospectus

Standards on Related Services (SRSs)

SRS 4400 Engagements to Perform Agreed-upon Procedures Regarding


Financial Information

SRS 4410 Compilation Engagements

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