Guide to Using International Standards on Auditing in - IFAC

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<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
1.2 Content and Organization
Rather than just summarize each ISA in turn, the <strong>Guide</strong> has been organized in<strong>to</strong> two volumes as follows:
• Volume 1—Core Concepts
• Volume 2—Practical Guidance
This is Volume 1 of the <strong>Guide</strong>, which provides an overview of the entire audit and a discussion of key audit
concepts such as materiality, assertions, internal control, risk assessment procedures, and the use of further audit
procedures in responding <strong>to</strong> assessed risks. It also includes a summary of ISA requirements with respect <strong>to</strong>:
• Specific areas such as accounting estimates, related parties, subsequent events, going concern, and others;
• Documentation requirements; and
• Forming an opinion on the financial statements.
Volume 2 of the <strong>Guide</strong> focuses on how <strong>to</strong> apply the concepts outlined in Volume 1. It follows the typical
stages involved in performing an audit, starting with client acceptance, planning, and risk assessment, and
then the risk response, evaluating audit evidence obtained, and forming an appropriate audit opinion.
To avoid repetition, Volume 2 has not repeated the requirements of ISAs that address specific audit issues
such as estimates, related parties, subsequent events, going concern, and various other ISAs. Volume 1
summarizes these requirements in separate chapters or as part of Chapter 15, which is entitled “Summary of
Other ISA Requirements.”
Summary of Organization
Each chapter in both volumes of this <strong>Guide</strong> has been organized in the following format:
• Chapter Title
• Audit Process Chart—Extract
Most chapters contain an extract from the audit process chart (where applicable) <strong>to</strong> highlight the
particular activities addressed in the chapter.
• Chapter Content
This outlines the content and purpose of the chapter.
• Relevant ISAs
Most chapters in this <strong>Guide</strong> begin with some extracts from the ISAs that are relevant <strong>to</strong> the chapter
content. These extracts include relevant requirements and, in some cases, the objectives (sometimes
highlighted separately if/when a chapter focuses primarily on one particular ISA), selected definitions,
and application material. The inclusion of these extracts is not meant <strong>to</strong> imply that other material in
the ISA not specifically mentioned, or other ISAs that relate <strong>to</strong> the subject matter, do not need <strong>to</strong> be
considered. The extracts in the <strong>Guide</strong> are based solely on the judgment of the authors as <strong>to</strong> what is
relevant for the content of each particular chapter. For example, the requirements of ISAs 200, 220,
and 300 apply throughout the audit process, but have only been addressed specifically in one or two
chapters.
• Overview and Chapter Material
The overview in each chapter provides:
– Extracts from applicable ISAs; and
– An overview of what is addressed in the chapter.