ENGAGEMENT & QUALITY CONTROL STANDARDS CA
3 Layer Technique Layer 1 – Summaries Summaries for Last Minute Revision Layer 2 – SA SA Notes Layer 3 – Detailed Detailed answers on questions on Standards
A C oncep tual, C l e a r & C o m pr e he n si ve A pp ro ac h CA Sarthak Jain All India CA Ranker
1
Private Circulation only
Engagement and Quality Control Standards has been an area where students for long have been suffering from inadequate resources and reference material for understanding these standards in the right perspective with relevant jargon but in user friendly language.
These notes are just a humble attempt in the right direction and trust they shall prove to one of the most updated, precise and accurate material on Engagement and Quality Control Standards. I hope and rationally trust that this creation of mine will give you the best for you exams. “These
notes are not meant for commercial publication. We wished if we
could publish and help all CA students to take advantage of these notes... but since these NOTES are result of undivided love and faith of our students I would like to dedicate these notes to to the students and why not certain privileges should only be available to students of F.A.S.T. across the country.”
Rights with the Author Edition
First & Last
–
In this dynamic world, we don’ t believe in revising and publishing edition 1, 2, 3... We believe in constant-complete revolution. So, every edition is a thoroughly researched and updated new publication. So, no new editions, only new publications every time.
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M1 - M2, Trade Center, South Tukoganj, Kanchan Bagh, Indore (M.P.) Ph : 0731- 6464648, +91 92292 23040. Web Portal: www.fast-india.in
Also follow us on All rights reserved. No part of the material protected by this copyright notice may be reproduced or utilized in any form or by by any means, means, electronic or mechanical, including photo graphy, recording
or by any information storage and retrieval system, nor exported without the written permission of the copyright owner. Although every care has been taken but still mistakes may appear in this book, neither author nor publisher is responsible for any sort of damage caused to the reader due to any unwanted
mistake, error or omission found therein this book. Subject to Indore Jurisdiction
Engagement and Quality Control Standards has been an area where students for long have been suffering from inadequate resources and reference material for understanding these standards in the right perspective with relevant jargon but in user friendly language.
These notes are just a humble attempt in the right direction and trust they shall prove to one of the most updated, precise and accurate material on Engagement and Quality Control Standards. I hope and rationally trust that this creation of mine will give you the best for you exams. “These
notes are not meant for commercial publication. We wished if we
could publish and help all CA students to take advantage of these notes... but since these NOTES are result of undivided love and faith of our students I would like to dedicate these notes to to the students and why not certain privileges should only be available to students of F.A.S.T. across the country.”
Rights with the Author Edition
First & Last
–
In this dynamic world, we don’ t believe in revising and publishing edition 1, 2, 3... We believe in constant-complete revolution. So, every edition is a thoroughly researched and updated new publication. So, no new editions, only new publications every time.
Published By -
M1 - M2, Trade Center, South Tukoganj, Kanchan Bagh, Indore (M.P.) Ph : 0731- 6464648, +91 92292 23040. Web Portal: www.fast-india.in
Also follow us on All rights reserved. No part of the material protected by this copyright notice may be reproduced or utilized in any form or by by any means, means, electronic or mechanical, including photo graphy, recording
or by any information storage and retrieval system, nor exported without the written permission of the copyright owner. Although every care has been taken but still mistakes may appear in this book, neither author nor publisher is responsible for any sort of damage caused to the reader due to any unwanted
mistake, error or omission found therein this book. Subject to Indore Jurisdiction
PREFACE
A
CA is said to be an expert of Auditing. An understanding of auditing procedures and Auditing Standards is imperative for attaining expert knowledge in this field. For a student of CA too, the importance of Auditing is immense due to upcoming trends and issues on Auditor's responsibility, introduction of international auditing standards consequently it is becoming the favori te of not just the examiners but also the interviewers looking to recruit fresher Chartered Accountants. The aim of writing this book is not just to ensure comprehensive coverage of the subject but also to help the reader to gain conceptual clarity and practical understanding on each and every topic. A lot of research has been made for preparation of the book and various live examples have been incorporated for making the content more relevant and for easier comprehensi on of the readers. Since CA exams expect expert level of knowledge from the students every effort has been made to cover each and every concept with utmost detail. Further, at length discussions discussions have been been made with various Senior Executives Executives of of premier Indian corporate, professionals of the BIG 4 audit firms, industry professionals, interviewers of various companies, experienced CAs, etc. for incorporating practical cases, updations, etc in the book. I further extend my gratitude to all the professionals who have spared their thei r time and effort for the book. Additionally, for readers' convenience, we have compiled all previous exam questions, FAQs apart from other brain teasers along with relevant extract from Standards on Auditing making the book a single reference module for the students. I would like to thank my team and every person who has assisted in making this book possible. possibl e. Above all, I would like to thank all faculties of FAST for their support, an Institute dedicated for overall development of its students. Although great care has been taken while preparing this book, still some errors might have crept in. I will be highly obliged if you kindly bring in my notice about any error, omission or suggestion for the improvement of this book. Jain’ & ‘Medha Agrawal’ who have Special thanks to my dear student Praveen Jain’ dedicated their time and hard work in the preparation of the content of this book ‘
All India CA Rank
Holder
AUTHOR’S NOTE
The maintenance of quality in every engagement is the collective concern of the Institute as well as all members of the profession. Further, being a member of IFAC requires ICAI to maintain international quality standards for all engagements undertaken by chartered accountants.
In an attempt to guide the members of the Institute to ensure that every engagement, be it Audit, Review, other Assurance or Related Service in order to achieve a standardization the Institute has issued Engagement and Quality Control Standards
divided
into
Standards
on
Auditing
(SA),
Standard
on
Review
Engagements (SRE), Standard on Other Assurance Engagements (SAE) and Standard on Related Services (SRS).
ICAI being a member of International body of Accountants has issued all the above standards in line with the internationally accepted standards and has also in the standards
detailed
material
modification
in
comparison
to
the
international
standards. However, as a part of CA curriculum the Indian context of the standard is only relevant.
Syllabus of STANDARDS ON AUDITING FAST EXCLUSIVE HELICOPTER CHARTS Engagement and Quality Control Standards(FRAMEWORK ) ASSURANCE SERVICES OTHER THAN AUDIT & AUDIT & REVIEW REVIEW
OTHER SERVICES RELATED SERVICES
AUDIT SA
REVIEW SRE
OTHER ASSURANCE SAE
NON-ASSURANCE SRS
100-1699
2000-2699
3000-3699
4000-4699
FRAMEWORK OF SAs AREA Introductory Matters (Not yet Issued) General Principles and Responsibilities Risk Assessment & Response to Assessed Risks Audit Evidences Using Work of Others Audit Conclusions and Reporting
SERIES 100 – 199 200 – 299 300 – 499 500 – 599 600 – 699 700 – 799
Various sections of SAs
Introduction (Purpose and Scope) Requirements
Objective of SA
Definitions
Application & Other Explanatory matters
Appendix, if any
GENERAL PRINCIPLES AND RESPONSIBILITIES (200 SA
Name
200 Overall Objectives of the Independent Auditor and the Conduct of an Audit in accordance with Standards
210 Agreeing the Terms of Audit Engagements 220 Quality Control for Audit of Financial Statements 230 Audit Documentation 240 The Auditor’ s Responsibilities Relating to Fraud in an Audit of Financial Statements
250 The Auditor’ s Responsibilities Relating to Laws and Regulation in an Audit of Financial Statements
260 Communication with Those Charged with Gover nance 265 Communicating Deficiencies in Internal Control to Those Charged With Governance and Management
299 Responsibilities of Joint Auditors
299)
–
Layer 1
Layer 2
Layer 3
Page No.
Page No.
Page No.
7
2-9
10-14
8-9
10-15
14-15
10-11
16-19
15-16
12
20-23
16-18
13
24-27
18-24
14
28-31
24-26
15
32-35
26-27
16
36-37
27
16
38-39
28-30
RISK ASSESSMENT & RESPONSE TO ASSESSED RISKS (300
–
499)
Layer 1
Layer 2
Layer 3
Page No.
Page No.
Page No.
17
42-45
30-33
18
46-49
34-42
17
50-53
42-44
330 The Auditor’ s Responses to Assessed Risks
19-20
54-59
44-45
402 Audit Considerations Relating to an Entity Using Service a
21-22
60-63
46-47
23
64-67
47
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Layer 2 Page No.
Layer 3 Page No.
SA
Name
300 Planning an Audit of Financial Statements 315 Identifying
and Assessing the Risk of Misstatement through Understanding the Entity
Material and its
320 Materiality in Planning and Performing an Audit
Organizations
450 Evaluation of Misstatements identified During the Audit AUDIT EVIDENCES (500 - 599) SA
Name
500
Audit Evidence
24
70-75
48-56
501
Audit Evidence - Specific Considerations for Selected Items
25
76-81
57-58
505 510
External Confirmations
26
82-85
59-61
Initial Audit Engagements – Opening Balances
27
86-89
61-63
520
Analytical Procedures
28
90-93
63-65
530 540
Audit Sampling
29
94-97
65-68
Auditing Accounting Estimates, Including Fair Value Accounting Estimates and Related Disclosures
30
98-101
68-69
550 560
Related Parties Subsequent Events
31
102-105
69-71
32
106-111
72-74
570 580
Going Concern Written Representations
33 34
112-117 118-120
74-78 78-82
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Page No.
Page No.
WORKS PERFORMED BY OTHERS (600-699) SA
Name
600 610
Using the Work of Another Auditor
35
122-123
82-84
Using the Work of Internal Auditors
35
124-125
84-85
620
Using the Work of an Audit or’ s Expert
36
126-130
86-88
AUDIT CONCLUSIONS AND REPORTING (700-799) SA
Name
Layer 1
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Page No.
Page No.
Page No.
700
Forming an Opinion and Reporting on Fi nancial Statements
37
132-137
88-89
705
Modifications to the Opinion in the Independent Auditor’ s
37
138-141
89-90
706
Emphasis of Matter Paragraphs and Other Paragraphs in the Independent Auditor’ s Report
37-38
142-143
710
Comparative Information – Corresponding Comparative Financial Statements
39
144-147
720
The Auditor’ s Information in Statements
40
148-149
Matter
Figures
and
Responsibility in Relation to Other Documents Containing Audited Financial
90-91
SA 701, 800 series, 2000 series, 3000 series & 4000 series covered separately
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