Interpretation and Application of International Standards on Auditing

650 Pages·2011·3.9 MB·English

by  Steven Collings

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WILEY
Interpretation
and Application
of International
Standards on
Auditing
P1:OTE/OTE/SPH P2:OTE
fm JWBK504-Collings February12,2011 6:57 PrinterName:YettoCome
P1:OTE/OTE/SPH P2:OTE
fm JWBK504-Collings February12,2011 6:57 PrinterName:YettoCome
WILEY
Interpretation
and Application
of International
Standards on
Auditing
Steven Collings
Leavitt Walmsley Associates Ltd
A John Wiley and Sons, Ltd., Publication
P1: OTE/OTE/SPH P2: OTE
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This edition first published 2011
(cid:1)C 2011 Steven John Collings
Registered office
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ExtractsfromFinalIFACPublicationsorExposureDraftsofProposedIFACPublications
Allextractsfromthe2010HandbookofInternationalQualityControl,Auditing,Review,OtherAssurance,
andRelatedServicesPronouncements(April2010)oftheInternationalAuditingandAssuranceBoard,
publishedbytheInternationalFederationofAccountants(IFAC)inApril2010areusedwithpermissionof
IFAC.
LibraryofCongressCataloging-in-PublicationData
Collings,Steven
Interpretationandapplicationofinternationalstandardsonauditing/StevenCollings.
p. cm.
ISBN978-0-470-66112-3(paperback)
1.Auditing–Standards. 2.FinancialStatements–Standards. I.Title.
HF5626.C6532011
657(cid:2).450218–dc22
AcataloguerecordforthisbookisavailablefromtheBritishLibrary.
ISBN978-0-470-66112-3(paperback);ISBN978-0-470-97970-9(ebk);
ISBN978-1-119-97378-2(epub);ISBN978-1-119-97379-9(emobi)
Typesetin10/11ptTimesbyAptaraInc.,NewDelhi,India
PrintedandboundintheUnitedKingdombyTJInternational,Padstow,Cornwall
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CONTENTS
Page
Chapter Title No.
Preface ix
Acknowledgements xi
AbouttheAuthor xiii
1 TheHistoryofAuditing ......................................... 1
2 TheClarityProject ............................................. 7
3 TheCodeofEthicsforProfessionalAccountants .................. 15
4 ISA200(revisedandredrafted)OverallObjectivesoftheIndependent
AuditorandtheConductofanAuditinAccordancewithInternational
StandardsonAuditing ......................................... 25
5 ISA210(redrafted)AgreeingtheTermsofAuditEngagements ..... 35
6 ISA220(redrafted)QualityControlforanAuditofFinancial
Statements .................................................... 39
7 ISA230(revised)AuditDocumentation .......................... 45
8 ISA240(redrafted)TheAuditor’sResponsibilitiesRelatingtoFraud
inanAuditofFinancialStatements ............................. 49
9 ISA250(redrafted)ConsiderationofLawsandRegulationsinanAudit
ofFinancialStatements ........................................ 63
10 ISA260(revisedandredrafted)CommunicationwithThose
ChargedwithGovernance ...................................... 69
11 ISA 265 Communicating Deficiencies in Internal Control to Those
ChargedwithGovernanceandManagement ...................... 79
12 ISA300(redrafted)PlanninganAuditofFinancialStatements ...... 85
13 ISA315(redrafted)IdentifyingandAssessingtheRisksof
MaterialMisstatementThroughUnderstandingtheEntityand
itsEnvironment ............................................... 91
14 ISA320(revisedandredrafted)MaterialityinPlanningandPerforming
anAudit ...................................................... 121
15 ISA330(redrafted)TheAuditor’sResponsestoAssessedRisks ..... 127
16 ISA 402 (revised and redrafted) Audit Considerations Relating to an
EntityUsingaServiceOrganisation ............................. 135
17 ISA450(revisedandredrafted)EvaluationofMisstatementsIdentified
duringtheAudit ............................................... 141
18 ISA500(redrafted)AuditEvidence .............................. 145
19 ISA501(redrafted)AuditEvidence—SpecificConsiderationsfor
SelectedItems ................................................ 157
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vi Contents
Page
Chapter Title No.
20 ISA505(revisedandredrafted)ExternalConfirmations ............ 165
21 ISA510(redrafted)InitialAuditEngagements—
OpeningBalances ............................................. 169
22 ISA520(redrafted)AnalyticalProcedures ........................ 173
23 ISA530(redrafted)AuditSampling .............................. 181
24 ISA540(revisedandredrafted)AuditingAccountingEstimates,
IncludingFairValueAccountingEstimates,andRelated
Disclosures ................................................... 191
25 ISA550(revisedandredrafted)RelatedParties .................... 203
26 ISA560(redrafted)SubsequentEvents ........................... 213
27 ISA570(redrafted)GoingConcern .............................. 221
28 ISA580(revisedandredrafted)ManagementRepresentations ....... 231
29 ISA600(revisedandredrafted)SpecialConsiderations—Audits
ofGroupFinancialStatements(IncludingtheWorkof
ComponentAuditors) .......................................... 239
30 ISA610(redrafted)UsingtheWorkofInternalAuditors ........... 249
31 ISA620(revisedandredrafted)UsingtheWorkofan
Auditor’sExpert .............................................. 253
32 ISA700(revised)ForminganOpinionontheFinancial
Statements .................................................... 257
33 ISA 705 (revised and redrafted) Modifications to the Opinion in the
IndependentAuditor’sReport .................................. 265
34 ISA706(revisedandredrafted)EmphasisofMatterParagraphs
andOtherMatter(s)ParagraphsintheIndependentAuditors’
Report ....................................................... 269
35 ISA710(redrafted)ComparativeInformation—CorrespondingFig-
uresandComparativeFinancialStatements ...................... 273
36 ISA720(redrafted)TheAuditor’sResponsibilitiesRelatingto
OtherInformationinDocumentsContainingAuditedFinancial
Statements .................................................... 279
37 ISA 800 (revised and redrafted) Special Considerations — Audits of
Financial Statements Prepared in Accordance with Special Purpose
Frameworks .................................................. 283
38 ISA 805 (revised and redrafted) Special Considerations — Audits
of Single Financial Statements and Specific Elements, Accounts or
ItemsofaFinancialStatement .................................. 287
39 ISA810(revisedandredrafted)EngagementstoReportonSummary
FinancialStatements ........................................... 291
40 TheFrameworkforthePreparationandPresentationofFinancial
Statements .................................................... 299
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Contents vii
Page
Chapter Title No.
41 IFRSforSmallandMediumEntities(SMEs) ...................... 307
42 ISQC1‘QualityControlforFirmsthatPerformAuditsandReviews
ofFinancialStatements,andOtherAssuranceandRelatedServices
Engagements’ ................................................. 321
Appendix1:OverviewofIFRSandIAS .......................... 335
Appendix2:IllustrativeAuditTests .............................. 433
Appendix3:IllustrativeFinancialStatements ..................... 445
Appendix4:IllustrativeAuditorReport(UKandIreland) .......... 607
Index 617
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