List of Standards on Auditing issued by the ICAI

The Institute of Chartered Accountants of India (ICAI), through its Auditing and Assurance Standards Board (AASB), issues Standards on Auditing to provide a professional framework for conducting audits in India. These standards prescribe principles and procedures relating to audit planning, risk assessment, evidence, documentation, internal controls and reporting. They help auditors maintain consistency, professional competence, independence and objectivity while performing audit engagements. The Standards on Auditing are aligned with international auditing practices, while considering Indian legal and regulatory requirements. They are applicable to audits conducted under the relevant framework and help improve the quality, reliability and credibility of audit work and financial reporting.

1. SA 200: Overall Objectives of the Independent Auditor

SA 200 establishes the overall objectives of an independent auditor and explains the basic responsibilities involved in conducting an audit. The auditor aims to obtain reasonable assurance that the financial statements as a whole are free from material misstatement due to fraud or error. The standard requires the auditor to exercise professional judgement and maintain professional scepticism throughout the audit. It also requires compliance with relevant ethical requirements and appropriate planning and performance of audit procedures. SA 200 applies to audits of financial statements and provides the fundamental framework for applying other Standards on Auditing. It forms the foundation of an independent financial statement audit.

2. SA 210: Agreeing the Terms of Audit Engagements

SA 210 deals with the auditor’s responsibility for agreeing the terms of an audit engagement with management or those charged with governance. Before accepting or continuing an audit, the auditor considers whether the preconditions for an audit exist. The terms generally include the objective and scope of the audit, responsibilities of the auditor and management, applicable financial reporting framework and expected form of reports. The terms should be documented appropriately, usually through an engagement letter. SA 210 applies when an auditor accepts or continues an audit engagement. It helps establish a clear understanding between the auditor and client and reduces misunderstandings regarding audit responsibilities.

3. SA 220: Quality Management for an Audit of Financial Statements

SA 220 deals with quality management at the engagement level for audits of financial statements. It establishes responsibilities for the engagement partner and other members of the engagement team in ensuring that the audit complies with professional standards, legal requirements and applicable firm policies. The standard covers matters such as ethical requirements, acceptance and continuance, resources, direction, supervision, review and consultation. The engagement partner remains responsible for the overall quality of the audit engagement. SA 220 applies to audits of financial statements and helps ensure that appropriate quality management procedures are followed throughout the engagement, thereby improving the reliability and effectiveness of audit work.

4. SA 230: Audit Documentation

SA 230 deals with the auditor’s responsibility to prepare adequate documentation for an audit. Audit documentation records the audit procedures performed, evidence obtained and conclusions reached by the auditor. It should be detailed enough to enable an experienced auditor, having no previous connection with the audit, to understand the significant matters considered and conclusions reached. Documentation also supports supervision, review and quality management of the engagement. SA 230 applies to audits of financial statements and requires auditors to complete documentation within the prescribed period. Proper documentation provides evidence that the audit was planned and performed in accordance with applicable Standards on Auditing.

5. SA 240: Auditor’s Responsibilities Relating to Fraud

SA 240 deals with the auditor’s responsibilities relating to fraud during an audit of financial statements. The auditor must consider the risks of material misstatement resulting from fraud and maintain professional scepticism throughout the audit. The auditor identifies and assesses fraud risks and designs appropriate audit procedures to respond to those risks. Fraud may involve fraudulent financial reporting or misappropriation of assets. Management and those charged with governance remain primarily responsible for preventing and detecting fraud. SA 240 applies to financial statement audits and provides guidance for responding to identified fraud risks. It helps auditors give appropriate attention to circumstances that may indicate fraudulent activity.

6. SA 250: Consideration of Laws and Regulations

SA 250 deals with the auditor’s responsibility to consider laws and regulations during an audit of financial statements. The auditor obtains an understanding of relevant legal and regulatory requirements and considers their effect on the financial statements. Non compliance with laws may result in material misstatements, penalties, litigation or other consequences. The auditor performs appropriate procedures to identify possible instances of non compliance that could materially affect the financial statements. SA 250 applies to audits where laws and regulations are relevant. It helps auditors appropriately consider legal requirements while performing audit procedures and reporting matters arising from non compliance when required by applicable standards or law.

7. SA 260: Communication with Those Charged with Governance

SA 260 deals with communication between the auditor and those charged with governance of an entity. These persons may include the board of directors or audit committee responsible for overseeing financial reporting. The auditor communicates important matters such as the auditor’s responsibilities, planned scope and timing of the audit, significant findings, difficulties encountered and relevant independence matters. Effective communication helps those charged with governance understand significant issues arising during the audit. SA 260 applies to audits of financial statements and promotes transparent communication between the auditor and governance bodies. It supports effective oversight of financial reporting and contributes to better corporate governance.

8. SA 265: Communicating Deficiencies in Internal Control

SA 265 deals with the auditor’s responsibility to communicate identified deficiencies in internal control to management and those charged with governance. During an audit, the auditor may identify weaknesses in the design or operation of internal controls that could prevent or detect material misstatements. The auditor evaluates the significance of these deficiencies and communicates important matters appropriately. The objective is not to provide a separate opinion on internal control unless specifically required, but to communicate relevant deficiencies identified during the audit. SA 265 applies to financial statement audits and helps management understand weaknesses in internal controls and take appropriate corrective action.

9. SA 300: Planning an Audit of Financial Statements

SA 300 deals with the auditor’s responsibility to plan an audit properly. Effective planning helps the auditor determine the overall audit strategy and develop a detailed audit plan. The auditor considers the nature, timing and extent of audit procedures, assessed risks, materiality and available resources. Planning is a continuous process and may be modified when circumstances or information change during the audit. SA 300 applies to audits of financial statements and helps auditors focus on significant areas and allocate resources effectively. Proper planning improves audit efficiency and effectiveness and reduces the risk of overlooking important matters during the audit engagement.

10. SA 315: Identifying and Assessing Risks of Material Misstatement

SA 315 deals with identifying and assessing risks of material misstatement in financial statements. The auditor obtains an understanding of the entity, its environment, relevant internal controls and financial reporting processes. Risks may arise due to fraud or error and may exist at the financial statement level or assertion level. The auditor uses this understanding to identify and assess significant risks and determine appropriate audit responses. SA 315 applies to audits of financial statements and is an important standard for risk based auditing. It helps auditors focus their work on areas where material misstatements are more likely and design appropriate procedures.

11. SA 330: Auditor’s Responses to Assessed Risks

SA 330 deals with the auditor’s responsibility to design and implement appropriate responses to risks of material misstatement identified and assessed under SA 315. The auditor develops overall responses and performs further audit procedures, including tests of controls and substantive procedures where appropriate. The nature, timing and extent of procedures depend on the assessed level of risk. The auditor evaluates whether sufficient appropriate audit evidence has been obtained before forming conclusions. SA 330 applies to audits of financial statements and works closely with SA 315. It ensures that identified risks receive appropriate audit attention and that audit risk is reduced to an acceptably low level.

12. SA 402: Audit Considerations Relating to an Entity Using a Service Organisation

SA 402 deals with audit considerations when an entity uses the services of another organisation to perform functions relevant to financial reporting. Examples include payroll processing, accounting services and information technology services. The auditor considers how the service organisation’s activities affect the financial statements and the entity’s internal controls. The auditor may obtain information about relevant controls and, where appropriate, evaluate reports or perform procedures relating to the service organisation. SA 402 applies when an entity uses a service organisation whose activities are relevant to the audit. It helps auditors properly assess risks and obtain sufficient appropriate evidence in such circumstances.

13. SA 450: Evaluation of Misstatements Identified During the Audit

SA 450 deals with the auditor’s responsibility to evaluate misstatements identified during an audit. The auditor accumulates identified misstatements, other than those that are clearly trivial, and considers their effect individually and collectively on the financial statements. The auditor also communicates relevant misstatements to management and requests appropriate corrections where necessary. If management does not correct material misstatements, the auditor evaluates their effect on the audit opinion. SA 450 applies to audits of financial statements and helps auditors determine whether identified errors and misstatements could materially affect the financial statements. It supports appropriate evaluation before finalising the audit report.

14. SA 500: Audit Evidence

SA 500 establishes the auditor’s responsibility to obtain sufficient appropriate audit evidence as a basis for forming an audit opinion. Audit evidence may be obtained through inspection, observation, confirmation, inquiry, recalculation, reperformance and analytical procedures. The auditor considers the relevance and reliability of evidence before using it. The standard also provides guidance regarding information produced by the entity and its use as audit evidence. SA 500 applies to all audits of financial statements and provides fundamental principles for obtaining and evaluating evidence. It ensures that audit conclusions are properly supported and that the auditor does not express an opinion without an appropriate evidential basis.

15. SA 505: External Confirmations

SA 505 deals with the auditor’s use of external confirmation procedures to obtain audit evidence. External confirmation involves obtaining information directly from an independent third party, such as a bank, customer, supplier or financial institution. The auditor maintains control over the confirmation process and evaluates the responses received. External confirmations can provide reliable evidence regarding account balances, transactions, terms and other relevant information. SA 505 applies when external confirmation procedures are used or considered appropriate during a financial statement audit. It helps auditors obtain evidence from sources outside the entity and can provide stronger assurance regarding the accuracy and existence of selected financial information.

16. SA 520: Analytical Procedures

SA 520 deals with the auditor’s use of analytical procedures during an audit. Analytical procedures involve evaluating financial information by studying relationships between financial and non financial data, trends, ratios and expected values. They may be used during risk assessment, as substantive procedures and near the end of the audit to assist in forming an overall conclusion. Significant unexpected variations or unusual relationships may indicate possible material misstatements requiring further investigation. SA 520 applies to audits of financial statements and helps auditors analyse large volumes of information efficiently. It provides an effective method for identifying unusual trends and relationships that may require additional audit attention.

17. SA 530: Audit Sampling

SA 530 deals with the auditor’s use of audit sampling when performing audit procedures. Audit sampling involves examining less than the entire population while giving each sampling unit an appropriate chance of selection. The auditor determines an appropriate sample size and selection method based on the purpose of the procedure, population characteristics, sampling risk and expected misstatement. The results are evaluated to determine whether reasonable conclusions can be drawn about the entire population. SA 530 applies when audit sampling is used in an audit. It helps auditors efficiently examine large populations while maintaining a systematic and appropriate approach to obtaining and evaluating audit evidence.

18. SA 560: Subsequent Events

SA 560 deals with the auditor’s responsibilities relating to events occurring between the date of the financial statements and the date of the auditor’s report, as well as certain facts discovered after the report date. The auditor performs appropriate procedures to identify events requiring adjustment or disclosure in the financial statements. Events may provide additional evidence about conditions existing at the reporting date or relate to conditions arising after that date. SA 560 applies to audits of financial statements and helps ensure that relevant subsequent events are appropriately considered before the audit report is issued. It supports accurate financial reporting and appropriate audit conclusions.

19. SA 570: Going Concern

SA 570 deals with the auditor’s responsibilities relating to going concern. The auditor considers whether management’s use of the going concern basis of accounting is appropriate and whether events or conditions exist that may cast significant doubt on the entity’s ability to continue as a going concern. Indicators may include recurring losses, financial difficulties, liquidity problems or inability to obtain necessary finance. The auditor performs appropriate procedures and considers the implications for the audit report where material uncertainty exists. SA 570 applies to audits of financial statements and helps ensure that significant uncertainties concerning an entity’s ability to continue operations are appropriately evaluated and reported.

20. SA 580: Written Representations

SA 580 deals with the auditor’s responsibility to obtain written representations from management and, where appropriate, those charged with governance. These representations confirm management’s responsibilities for preparing the financial statements and providing complete information to the auditor. Written representations may also cover specific matters where appropriate audit evidence is required. However, representations cannot replace other audit evidence that the auditor should reasonably expect to obtain. SA 580 applies to audits of financial statements and establishes requirements concerning the form, timing and reliability of written representations. It provides additional evidence and confirms management’s acknowledgement of its responsibilities regarding financial reporting and the audit.

21. SA 700: Forming an Opinion and Reporting on Financial Statements

SA 700 deals with the auditor’s responsibility for forming an opinion on financial statements and reporting that opinion appropriately. The auditor evaluates whether sufficient appropriate audit evidence has been obtained and whether the financial statements are prepared, in all material respects, according to the applicable financial reporting framework. The standard establishes requirements relating to the form and content of the auditor’s report. SA 700 applies to audits of complete sets of general purpose financial statements. It provides a standardised basis for communicating the auditor’s opinion and helps ensure consistency, clarity and credibility in audit reporting.

22. SA 705: Modifications to the Opinion in the Independent Auditor’s Report

SA 705 deals with circumstances in which the auditor needs to modify the opinion expressed in the audit report. A modified opinion may be required when the financial statements contain material misstatements or when the auditor cannot obtain sufficient appropriate audit evidence. Depending on the circumstances and significance of the matter, the auditor may express a qualified opinion, adverse opinion or disclaimer of opinion. SA 705 applies to audits of financial statements where modification of the auditor’s opinion is necessary. It provides guidance for determining the appropriate type of modified opinion and ensures that significant limitations or misstatements are clearly communicated to users.

23. SA 706: Emphasis of Matter and Other Matter Paragraphs

SA 706 deals with the auditor’s use of Emphasis of Matter and Other Matter paragraphs in the independent auditor’s report. An Emphasis of Matter paragraph may be used to draw users’ attention to a matter appropriately presented or disclosed in the financial statements that is fundamental to their understanding. An Other Matter paragraph may refer to matters relevant to users’ understanding of the audit, auditor’s responsibilities or report. SA 706 applies when the auditor considers such communication necessary and the relevant conditions are satisfied. It helps auditors highlight important matters without modifying the audit opinion on the financial statements.