by Auditing and Assurance Standards Board (AASB) of the Institute of Chartered Accountants of India (ICAI) develops and issues Standards on Auditing (SAs) to establish principles and procedures for auditors. SA 200 – Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing provides the basic framework for conducting an audit and achieving reasonable assurance.
Procedure for Issue of Standards by AASB – SA 200
1. Identification of Need for a Standard
Auditing and Assurance Standards Board (AASB) identifies areas where new auditing guidance is required or existing standards need revision. The need may arise due to changes in business practices, technology, laws, accounting standards, international auditing practices, or professional requirements. AASB studies the existing framework and identifies gaps or emerging issues affecting auditors. This initial stage ensures that proposed standards address relevant and practical auditing requirements. The objective is to develop standards that promote uniformity, quality, consistency, and reliability in the conduct of audits.
2. Preparation of Exposure Draft
After identifying the requirement, AASB prepares an Exposure Draft of the proposed Standard on Auditing. The draft contains proposed objectives, requirements, application guidance, definitions, and explanatory material. While preparing it, AASB considers international auditing standards, Indian laws, professional practices, and the requirements of Indian businesses. The Exposure Draft provides a preliminary version of the proposed standard for public examination. It allows auditors and other stakeholders to understand the proposed requirements and provide their comments and suggestions before finalisation.
3. Consultation with Stakeholders
Exposure Draft is circulated among relevant stakeholders to obtain their views. These may include chartered accountants, audit firms, companies, regulators, government authorities, professional organisations, and other interested parties. Stakeholders examine the proposed provisions and identify practical difficulties, ambiguities, or areas requiring clarification. This consultation process improves the quality of the proposed standard by incorporating professional experience and practical considerations. It also promotes transparency and participation in the standard-setting process. Feedback received during this stage becomes an important input for subsequent consideration by AASB.
4. Consideration of Comments
After receiving responses, AASB carefully examines the comments, suggestions, and objections submitted by stakeholders. The Board evaluates whether the proposed requirements are clear, practical, relevant, consistent, and suitable for Indian auditing conditions. Important technical and practical issues raised during consultation are discussed by the Board. Where necessary, changes are made to the proposed provisions. This stage ensures that the final standard reflects appropriate professional judgement and addresses genuine concerns of stakeholders. The process helps produce standards that auditors can apply effectively in actual audit engagements.
5. Approval by AASB
After considering stakeholder feedback, AASB finalises the proposed Standard on Auditing. The Board reviews its technical content, terminology, applicability, and consistency with other auditing standards. It also ensures that the proposed standard is compatible with relevant legal requirements and professional principles. Once the Board is satisfied with the final draft, it approves the standard at its level and forwards it through the prescribed ICAI approval process. This stage represents an important technical review before the standard is formally considered for adoption and implementation.
6. Consideration by ICAI Council
The final draft prepared by AASB is submitted to the Council of the Institute of Chartered Accountants of India (ICAI) for consideration. The Council reviews the proposed standard and examines its technical, professional, legal, and practical implications. It may approve the standard, suggest modifications, or send it back for further consideration if necessary. Council consideration provides institutional authority to the standard-setting process. Approval at this level ensures that the proposed Standard on Auditing meets the required professional and regulatory expectations before its formal issue.
7. Notification and Issue of Standard
After receiving the required approval, the Standard on Auditing is formally issued by ICAI and made available to members and other stakeholders. The standard normally specifies its title, scope, requirements, applicability, and effective date. Auditors are expected to comply with applicable requirements when conducting audits covered by the standard. Formal issue ensures uniform implementation of auditing principles and procedures. Standards such as SA 200 therefore provide a common framework that supports consistency, professional quality, and reliability in the performance and reporting of independent audits.
8. Review and Revision
AASB continuously reviews issued Standards on Auditing to ensure that they remain relevant and effective. Changes in international auditing standards, Indian legislation, technology, business practices, accounting requirements, and emerging risks may make revisions necessary. When significant changes occur, AASB may revise, amend, replace, or withdraw an existing standard after following the appropriate standard-setting process. Regular review helps maintain the quality and relevance of auditing standards. It also enables Indian auditing practices to respond effectively to developments in the business and financial reporting environment.
