Guide to Using International Standards on Auditing in - IFAC

More documents

Recommendations

Info

220 <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 17.1 Overview The final step in the audit process is <strong>to</strong> evaluate the audit evidence obtained, consider the impact of any misstatements identified, form an audit opinion, and prepare an appropriately worded audit report. This chapter addresses: • Financial statements prepared in accordance with one or both of the two general purpose frameworks designed <strong>to</strong> meet the common financial-information needs of a wide range of users; • Forming an opinion on a complete set of general purpose financial statements. This is based on an evaluation of the conclusions drawn from the audit evidence obtained; and • Expressing clearly that opinion through a written report that also describes the basis for that opinion. Chapters 23 and 24 of Volume 2 of this <strong>Guide</strong> deal with situations where a modified opinion, Emphasis of Matter paragraph, or Other Matter paragraphs are required in the audi<strong>to</strong>r’s report. For audits conducted in accordance with ISAs, the wording of the unmodified audi<strong>to</strong>r’s report will contain a minimum number of elements. The wording will be standard, except where additional paragraphs are added for an emphasis of a matter or other reporting matters. Consistency in the audi<strong>to</strong>r’s report helps: • Promote credibility in the global marketplace by making more readily identifiable those audits that have been conducted in accordance with globally recognized standards; and • Promote the user’s understanding and helps <strong>to</strong> identify unusual circumstances (such as modifications <strong>to</strong> the audi<strong>to</strong>r’s report) when they occur. In some jurisdictions, the laws or regulations governing the audit of financial statements may prescribe different wording for the audi<strong>to</strong>r’s opinion. However, the audi<strong>to</strong>r’s responsibilities for forming the opinion remain the same. Where the wording differs significantly from the standard international wording, the audi<strong>to</strong>r would consider the risk that users might misunderstand the assurance obtained. If such a risk exists, further explanation could be added <strong>to</strong> the audi<strong>to</strong>r’s report. 17.2 Financial Reporting Frameworks The audi<strong>to</strong>r’s opinion on the financial statements will be made in the context of an applicable “general purpose” framework. This is a financial reporting framework designed <strong>to</strong> meet the common financial information needs of a wide range of users. Acceptable frameworks include: • <strong>International</strong> Financial Reporting Standard for Small and Medium-sized Entities; • <strong>International</strong> Financial Reporting <strong>Standards</strong>; and • <strong>International</strong> Public Sec<strong>to</strong>r Accounting <strong>Standards</strong>.
221 <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 There are two types of general purpose frameworks: the “fair presentation framework” and the “compliance” framework.” These frameworks are described in the following exhibit. Exhibit 17.2-1 Frameworks Fair Presentation Framework Compliance Framework Description A financial reporting framework (such as <strong>International</strong> Financial Reporting <strong>Standards</strong>) that requires compliance with the requirements of the framework, and: i) Acknowledges explicitly or implicitly that, <strong>to</strong> achieve fair presentation of the financial statements, it may be necessary for management <strong>to</strong> provide disclosures beyond those specifically required by the framework; or ii) Acknowledges explicitly that it may be necessary for management <strong>to</strong> depart from a requirement of the framework <strong>to</strong> achieve fair presentation of the financial statements. Such departures are expected <strong>to</strong> be necessary only in extremely rare circumstances. The audi<strong>to</strong>r reports on whether the financial statements “present fairly, in all material respects” or “give a true and fair view of” the information that the financial statements are designed <strong>to</strong> present. A financial reporting framework that requires compliance with the requirements of the framework, but does not contain the acknowledgements in (i) or (ii) above for “fair” presentation. The audi<strong>to</strong>r is not required <strong>to</strong> evaluate whether the financial statements achieve fair presentation. An example would be a financial reporting framework stipulated by a law or regulation that is designed <strong>to</strong> meet the financial information needs of a wide range of users. The audi<strong>to</strong>r reports on whether the financial statements are prepared, in all material respects, in accordance with, for example, “Jurisdiction X Corporations Act.”
Page 1 and 2:
Guide to</
Page 3 and 4:
3 Guide to
Page 5 and 6:
5 Guide to
Page 7 and 8:
Disclaimer This Guide</stro
Page 9 and 10:
9 Guide to
Page 11 and 12:
11 Guide t
Page 13 and 14:
13 2. Clarified ISAs In March 2009,
Page 15 and 16:
15 Guide t
Page 17 and 18:
17 Guide t
Page 19 and 20:
Volume 1 Core Concepts
Page 21 and 22:
21 Guide t
Page 23 and 24:
23 Guide t
Page 25 and 26:
25 Guide t
Page 27 and 28:
27 Guide t
Page 29 and 30:
29 Guide t
Page 31 and 32:
31 Guide t
Page 33 and 34:
33 Guide t
Page 35 and 36:
35 Guide t
Page 37 and 38:
37 Guide t
Page 39 and 40:
39 Guide t
Page 41 and 42:
41 Guide t
Page 43 and 44:
43 Guide t
Page 45 and 46:
45 Guide t
Page 47 and 48:
47 Guide t
Page 49 and 50:
49 Guide t
Page 51 and 52:
51 5. Internal Control — Purpose
Page 53 and 54:
53 Guide t
Page 55 and 56:
55 Guide t
Page 57 and 58:
57 Guide t
Page 59 and 60:
59 Guide t
Page 61 and 62:
61 Guide t
Page 63 and 64:
63 Guide t
Page 65 and 66:
65 Guide t
Page 67 and 68:
67 Guide t
Page 69 and 70:
69 Guide t
Page 71 and 72:
71 Guide t
Page 73 and 74:
73 Guide t
Page 75 and 76:
75 Guide t
Page 77 and 78:
77 6. Financial Statement Assertion
Page 79 and 80:
79 Guide t
Page 81 and 82:
81 Guide t
Page 83 and 84:
83 Guide t
Page 85 and 86:
85 Guide t
Page 87 and 88:
87 Guide t
Page 89 and 90:
89 Guide t
Page 91 and 92:
91 Guide t
Page 93 and 94:
93 Guide t
Page 95 and 96:
95 Guide t
Page 97 and 98:
97 Guide t
Page 99 and 100:
99 Guide t
Page 101 and 102:
101 Guide
Page 103 and 104:
103 Guide
Page 105 and 106:
105 Guide
Page 107 and 108:
107 Guide
Page 109 and 110:
109 Guide
Page 111 and 112:
111 Guide
Page 113 and 114:
113 Guide
Page 115 and 116:
115 10. Further Audit Procedures Ch
Page 117 and 118:
117 Guide
Page 119 and 120:
119 Guide
Page 121 and 122:
121 Guide
Page 123 and 124:
123 Guide
Page 125 and 126:
125 Guide
Page 127 and 128:
127 Guide
Page 129 and 130:
129 Guide
Page 131 and 132:
131 Guide
Page 133 and 134:
133 Guide
Page 135 and 136:
135 Guide
Page 137 and 138:
137 Guide
Page 139 and 140:
139 Guide
Page 141 and 142:
141 Guide
Page 143 and 144:
143 Guide
Page 145 and 146:
145 12. Related Parties Chapter Con
Page 147 and 148:
147 Guide
Page 149 and 150:
149 Guide
Page 151 and 152:
151 Guide
Page 153 and 154:
153 Guide
Page 155 and 156:
155 Guide
Page 157 and 158:
157 Guide
Page 159 and 160:
159 Guide
Page 161 and 162:
161 14. Going Concern Chapter Conte
Page 163 and 164:
163 Guide
Page 165 and 166:
165 Guide
Page 167 and 168:
167 Guide
Page 169 and 170: 169 Guide
Page 171 and 172: 171 15. Summary of Other ISA Requir
Page 205 and 206: 205 16. Audit Documentation Chapter
Page 219: 219 Guide
show all

Guide to Using International Standards on Auditing in - IFAC

Create successful ePaper yourself

Delete template?

Save as template?