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Sunday, August 22, 2010

AAS – 22/ SA 510: Initial Engagements – Opening Balances

  • Audit Procedures:
  1. A/c Policies being consistently followed;
  2. Correct balances of various a/c’s have been correctly b/f;
  3. Nature of Op. Bal. & risk of their misstatement in the current period;
  4. Verify whether the Op. Bal. do not contain misstatements that materially affect the financial statements of the current period;
  • Audit Reporting and Conclusions:
  1. Unable to obtain sufficient audit evidence: Give Qualified / Disclaimer of opinion
  2. Material misstatements that affect the current period financial statements: Give Qualified / Adverse opinion

Comparatives (AAS 25/ SA 710)

Comparatives:
1. Corresponding previous year figures;
2. Comparative Financial Statements
(1) vs. (2):
1. For CPYF, auditors report only refers to FS of current period;
2. For CFS, auditors report refers to each period for which FS are presented (i.e. auditors report covers preceding period also)
AAS 25 applicable only to CPYF;
Also refer SA 510 (AAS 22);
Where prior period FS were audited, the auditors’ report should not specifically comment on CPYF because the auditors’ opinion is on the current period FS as a whole including corresponding figures;
In case the prior period FS are unaudited, the incoming auditor should state such fact in the auditor’s report

Comparatives (AAS 25/ SA 710)

Comparatives:
1. Corresponding previous year figures;
2. Comparative Financial Statements
(1) vs. (2):
1. For CPYF, auditors report only refers to FS of current period;
2. For CFS, auditors report refers to each period for which FS are presented (i.e. auditors report covers preceding period also)
SA710/ AAS 25 applicable only to CPYF;
Also refer SA 510 (AAS 22);
Where prior period FS were audited, the auditors’ report should not specifically comment on CPYF because the auditors’ opinion is on the current period FS as a whole including corresponding figures;
In case the prior period FS are unaudited, the incoming auditor should state such fact in the auditor’s report