Auditing and Assurance standards - Audit Process, Auditing & Secretarial practice | Auditing and Secretarial Practice - B Com PDF Download

Auditing and Assurance standards: - An auditor Should have a thorough understanding of the auditing practices that are generally accepted as standards to conduct his audit effectively. For this purpose , he has to study and understand the professional announcement on auditing.

The objective of auditing and assurance standards issued by the ICAI is to secure compliance by the members of the institute on matters which are important for the proper discharge of their audit work.

Various Auditing and Assurance Standards issued by ICAI :

1. AAS 1 : Basic principles governing audit
2. AAS 2 : Objective and Scope of financial Audit
3. AAS 3: Documentation
4. AAS 4: Fraud and error
5. AAS 5 : Audit Evidence
6. AAS 6 : Risk Assessment and Internal Control
7. AAS 7 : Relying upon work of an Internal Auditor
8. AAS 8 : Audit planning
9. AAS 9: Using the Work of an Expert.
10. AAS 10 : Using the work of another Auditor
11. AAS 11 : Representation by Management.
12. AAS 12 : Responsibility by joint Auditors
13. AAS 13 : Audit Materiality
14. AAS 14: Analytical Procedures.
15. AAS 15 : Audit Sampling.
16. AAS 16: Going Concern Assumption.
17. AAS 17: Quality Control for Audit work.
18. AAS 18 : Audit of Accounting Estimate
19. AAS 19 : Subsequent events.
20. AAS 20 : Knowledge of the Business
21. AAS 21: Consideration of Laws and regulations in an Audit of Financial Statement.
22. AAS 22 : Initial Engagement
23. AAS 23 : Related Parties
24. AAS 24: Audit Consideration relating to Entities using Service Organisations.
25. AAS 25: Comparatives
26. AAS 26 : Terms of Audit Engagement
27. AAS 27 : Communication of Audit Matters with those entrusted with Governance.
28. AAS 28 : Auditor’s Report on Financial Statements.
29. Audit in Computer information system Environment

AAS – 1 :Basic principles governing an audit: - The basic principles governing an audit are:

1. Integrity, objectivity and independence: - This principle suggests that an auditor must be straight forward, honest sincere, fair and objective in the performance of his professional duties.
2. Confidentiality: - This principle implies that the auditor must not disclose any information acquired by him in the course of his audit work to any person.
3. Skills and Competence: - This principle means that an audit should be performed and the audit report should be prepared with due professional care by persons who have adequate training, experience and competence in auditing.
4. Work performed by Others : - This principle implies that when an auditor delegates his work to his assistants or uses the work performed by other auditors and experts , he will continue to responsible for performing and expressing his opinion on the financial statement.
5. Documentation : - This principle implies that all matters which are important in providing evidence that audit was carried out in accordance with basic principles should be adequately documented.
6. Planning : - This principle suggest that an auditor should plan his work to enable him to conduct an effective audit in an efficient and timely manner.
7. Audit evidence : - This principle implies that an auditor should obtain sufficient appropriate evidence to draw reasonable conclusions.
8. Accounting system and Internal Control : - This principle suggests that an auditor should reasonably assure himself that the accounting system and internal control are adequate.
9. Audit conclusion and reporting : - This principle implies that an auditor should review and assess the conclusions drawn from the audit evidence obtained.

AAS – 2: Objective and scope of Financial Audit: - This Standard deals with
(a) the objective of an audit, namely, the expression an opinion on the financial statements and
(b) the scope of audit, which is determined by the terms of his engagement, requirement of the law and the pronouncements of the ICAI. As per these standards an auditor is required to satisfy himself as to reliability and sufficiency of information as contained in the accounting records.

AAS – 3: Documentation: - This standards deals with documentation of important evidentiary matters. It provides detailed guidance on the form, content and custody of working papers.

Working papers are the written private materials which an auditor prepares for each audit. They describe the accounting information which he has received from his client, the method of examinations used and conclusions about the financial statement

AAS – 4 : Fraud and Error : - This standard deals with an auditor’s responsibility for detection of fraud and error, while carrying out an audit.

AAS – 5: Audit evidences: - This standard deals with an auditor’s duty to obtain sufficient appropriate evidence which enables him to draw reasonable conclusion s.

AAS-6: Risk Assessment and internal control: - This standard deals with the procedures to be followed by an auditor to obtain an understanding of the accounting and internal control system and audit risk.

AAS – 7 : Relying upon work of internal auditor: - This standards seeks to provide guidance regarding the procedures to be followed by the external auditor in assessing the work of an internal auditor.

AAS – 8 : Audit Planning : - This standards lists the advantage of audit planning which is necessarily to conduct an effective audit in an efficient manner.

AAS – 9 : Using the work of an expert: - This standard recognizes the need for an auditor to use the work of an expert for any work.

AAS – 10: Using the work of another auditor: This standard highlights the procedure to be followed be principal auditor while using the work .