Guide to Using International Standards on Auditing in - IFAC

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12 <strong>Guide</strong> <strong>to</strong> <strong>Using</strong> <strong>International</strong> <strong>Standards</strong> on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts 1.4 Acronyms Used in the <strong>Guide</strong> AR Assertions (combined) CAATs CU FS HR IAASB IC IESBA Code IFAC IFRS ISAs ISAEs IAPSs ISQCs ISREs ISRSs IT PC R&D RMM RAPs SME SMP TOC TCWG WP Accounts receivable C= Completeness E = Existence A = Accuracy and cu<strong>to</strong>ff V = Valuation Computer-assisted audit techniques Currency units (standard currency unit is referred <strong>to</strong> as “Є”) Financial statements Human resources <strong>International</strong> Auditing and Assurance <strong>Standards</strong> Board Internal Control. The five major components of internal control are as follows: CA = Control activities CE = Control environment IS = Information systems MO = Moni<strong>to</strong>ring RA = Risk assessment IESBA Code of Ethics for Professional Accountants <strong>International</strong> Federation of Accountants <strong>International</strong> Financial Reporting <strong>Standards</strong> <strong>International</strong> <strong>Standards</strong> on Auditing <strong>International</strong> <strong>Standards</strong> on Assurance Engagements <strong>International</strong> Auditing Practice Statements <strong>International</strong> <strong>Standards</strong> on Quality Control <strong>International</strong> <strong>Standards</strong> on Review Engagements <strong>International</strong> <strong>Standards</strong> on Related Services Information technology Personal computer Research and development Risks of material misstatement Risk assessment procedures Small- and medium-sized entities Small- and medium-sized (accounting) practices Tests of controls Those charged with governance Work papers, working papers
13 2. Clarified ISAs In March 2009, the IAASB announced the completion of its program <strong>to</strong> enhance the clarity of its ISAs (Clarity Project). This program involved the application of new drafting conventions <strong>to</strong> all ISAs, either as part of a substantive revision or through a limited redrafting, <strong>to</strong> reflect the new conventions and matters of clarity generally. Audi<strong>to</strong>rs now have access <strong>to</strong> 36 newly updated and clarified ISAs and a clarified ISQC. Structure of Clarified <strong>Standards</strong> The clarified ISAs have a common structure, as outlined below. ISA Element Introduction Objectives Definitions Requirements Comments An explanation of the purpose and scope of the ISA, including how the ISA relates <strong>to</strong> other ISAs, the subject matter of the ISA, specific expectations on the audi<strong>to</strong>r and others, and the context in which the ISA is set. The objective <strong>to</strong> be achieved by the audi<strong>to</strong>r as a result of complying with the requirements of the ISA. To achieve the overall objectives of the audi<strong>to</strong>r, the audi<strong>to</strong>r is required <strong>to</strong> use the objectives stated in relevant ISAs in planning and performing the audit, keeping in mind the interrelationships among the ISAs. ISA 200.21 (a) requires the audi<strong>to</strong>r <strong>to</strong>: (a) Determine whether any audit procedures in addition <strong>to</strong> those required by the ISAs are necessary in pursuance of the objectives stated in the ISAs; and (b) Evaluate whether sufficient appropriate audit evidence has been obtained. A description of the meanings attributed <strong>to</strong> certain terms for purposes of the ISAs. These are provided <strong>to</strong> assist in the consistent application and interpretation of the ISAs. They are not intended <strong>to</strong> override definitions that may be established for other purposes, such as those contained in laws or regulations. Unless otherwise indicated, these terms carry the same meanings throughout the ISAs. This section outlines the specific audi<strong>to</strong>r requirements. Each requirement contains the word “shall.” For example, ISA 200.15 contains the following requirement: “The audi<strong>to</strong>r shall plan and perform an audit with professional skepticism, recognizing that circumstances may exist that cause the financial statements <strong>to</strong> be materially misstated.”
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