Which ISA describes the overall objectives of the auditor and the conduct of an audit in accordance with ISAs?

ISA 200 (REVISED AND REDRAFTED) OVERALL OBJECTIVES OF THE INDEPENDENT AUDITOR AND THE CONDUCT OF AN AUDIT IN ACCORDANCE WITH INTERNATIONAL STANDARDS ON AUDITING

ISA 200 (revised and redrafted) deals with the independent auditor’s responsibilities when conducting an audit of financial statements in accordance with the International Standards on Auditing (ISAs). ISA 200 sets out the objectives of the independent auditor and also explains the nature and scope of an audit which will enable the independent auditor to meet the objectives. This ISA is considered such a fundamental ISA that all the other ISAs refer to them being read in conjunction with this ISA.

In all respects, the auditor is required to comply with the ISAs and ISA 200 explains the auditor’s responsibility to ensure that an audit of financial statements must be undertaken in accordance with the ISAs. The ISAs do not address issues that the auditor is required to comply with that may exist in various legislations (for example, Companies Acts) and the auditor should ensure that they comply with all relevant legal, regulatory or professional obligations.

Illustration

The year-end financial statements of Parsonova Enterprises Limited, a company based in the UK, have been prepared but no disclosure has been made in the financial statements showing the total amount of directors’ remuneration that has been paid to the directors in the year. The directors do not wish to include such disclosure because they believe such ...

This is the complete summary of ISA 200, Overall Objectives of the Independent Auditor, and the Conduct of an Audit in Accordance with International Standards on Auditing.

The summary follows the standard structure of ISA which starts from Introduction, and follow by Objective, Definition, Requirement, and finally Application of Standard.

Introduction

  • Overall responsibilities of auditor auditing the financial statements based on ISA
  • Enable the independent auditor to meet those objectives
  • Explains the scope, authority, and structure of the ISAs
  • Cover when the audit financial statements by ISA
  • Increase the degree of confidence of users of financial statements
  • By express their option on the financial statements according to the framework they are preparing.
  • The financial statements re-prepare by management and under the supervision of Those Charged with governance.
  • It is not over right any law and regulation
  • It requires the auditor to obtain reasonable assurance on financial statements
  • Reasonable Assurance is not an absolute assurance, inherent limitation.
  • The form of opinion expressed by the auditor will depend upon the applicable financial reporting framework and any applicable law or regulation

Overall Objectives ISA 200:

Overall, the main objective of this ISA are:

  • To obtain reasonable assurance on the financial statements
  • To report on the financial statements, and communicate as required by the ISAs, in accordance with the auditor’s findings.

Definitions of the key term in ISA 200:

For a definition, please refer to the full ISA.

  • Applicable financial reporting framework—Refer to the framework that management use to prepare its entity’s financial statements and acceptable by relevance authority and regulator
  • Audit evidence—Refer to any kind of information that audit use in order to drive conclusions on their audit.
  • Audit risk—The that prevent auditor to make the right conclusion.
  • Auditor—Professional who perform audit works.
  • Detection risk—is basically refer to the risk that auditor might not detect.
  • Financial statements—The five statements including Balance Sheet, Income Statements, Statement of Change in Equity, Statement of Cash Flow and Noted to Financial Statement.Advertisements
  • Historical financial information—Please refer to full ISA
  • Management—Please refer to full ISA
  • Misstatement—Please refer to full ISA
  • Professional judgment—Please refer to full ISA
  • Professional skepticism—Please refer to full ISA
  • Reasonable assurance—Please refer to full ISA
  • Risk of material misstatement—Please refer to full ISA

Related article  What Does Materiality in Audit and Accounting?

Requirements of ISA 200:

  • Ethical Requirements Relating to an Audit of Financial Statements— Comply with relevant ethical requirements.
  • Professional Skepticism— plan and perform an audit with professional skepticism.
  • Professional Judgment— exercise professional judgment in planning and performing
  • Sufficient Appropriate Audit Evidence and Audit Risk— sufficient appropriate audit evidence to reduce audit risk to an acceptably low level
  • Conduct of an Audit in Accordance with ISAs— comply with all ISAs relevant to the audit, understand the entire areas of ISA.

What are the overall objectives of the auditor in the conduct of the audit of financial statements?

The auditor's objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes the auditor's opinion.

Which deals with overall objectives of the independent auditor and conduct of an audit in accordance with Standards on Auditing?

1. This International Standard on Auditing (ISA) establishes the independent auditor's overall responsibilities when conducting an audit in accordance with ISAs. 2. ISAs are written in the context of an audit of financial statements by an independent auditor.

What is the objective of ISA 315?

Paragraph 3 of ISA 315 (Revised) states that the objective of the auditor is to identify and assess the risks of material misstatement, whether due to fraud or error, at the financial statement and assertion levels.

What is the purpose of ISA 210?

This ISA is intended to assist the auditor in the preparation of engagement letters relating to audits of financial statements. The guidance is also applicable to related services. When other services such as tax, accounting, or management advisory services are to be provided, separate letters may be appropriate.