International Standards on Auditing

Product Information

the possible effects on the financial statements of undetected misstatements, arising from an inability to obtain sufficient appropriate audit evidence, could be material but not pervasive. Requires external audit to understand the nature of the internal audit function’s responsibilities, status and activities; recognising that this can vary widely across organisations. From a professional perspective team compliance with IIA IPPF 1100 Independence & Objectivity will provide comfort to the external auditor and therefore increase the likelihood of being able to use internal audit outputs. But it is also important to recognise that the roles of internal and external audit are quite different; external audit’s role and responsibilities are defined, whereas internal audit’s activities may stretch far and wide across an organisation from an efficiency, effectiveness and economy perspective and therefore may not be directly or sufficiently relevant to financial reporting, upon which external audit is focused. Where the external auditor is not satisfied with the organisational status, objectivity and general professionalism of its work, they should not rely upon any aspect of its activity to reduce their own audit procedures.

The Financial Reporting Council (FRC) has launched a consultation to strengthen auditor requirements to detect and report material misstatements from non-compliance with laws and regulations and to clarify instances auditors should report such breaches, and other significant matters, to the relevant regulators. Evaluates the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors A new approach to risk assessment - February 2021: This Audit & Beyond article considers the key changes in the revised standard.The auditor’s report is required to contain a clear expression of opinion on the financial statements taken as a whole. ISAE 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus

Evaluates the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation (i.e gives a true and fair view).1 ISA 800, Special Considerations-Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks Furthermore, we must remember that the external audit is generally focused upon the past; whereas modern internal audit is forward looking. The reality of the world is that external audit have a rather narrow and defined responsibility in respect of the Financial Statements; whereas modern internal audit is increasingly looking beyond simple compliance with financial policy and into the much wider reaches of governance, risk management, and internal controls from an efficiency, effectiveness and economy perspective across the breadth of an organisation’s activities and associated risks. Groundwork for an international set of standards for auditing began in 1969 with the publication of a number of reports focusing on international auditing by the Accountants International Study Group, comparing the situation in Canada, the UK and US. A few years later, the establishment of the International Accounting Standards Committee in 1973 generated many calls for a similar body to be set up on the auditing front.

History and development of UK auditing standards

ISA 720: The Auditor’s Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements