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Dear Sir,
I would like to get the clarification on the following:
1. My understanding on ISAs – this is not law, they are just professional guidelines. Some countries have adopted ISAs, some are following local regulations. If the local regulation depart from ISA, they IFAC members are encouraged to adjust them to ISA, however this is not mandatory.
My question is, how shall I understand the following tutorial note from Kaplan book: “ISAs must be applied in all but exceptional cases. Where the auditor deems it necessary to depart from ISA to achieve overall aim of the audit, this depart must be justified”.
2. Risk assessment – when is it performed?
a) for the potential new client during the “client screening” process, before the new client is accepted
b) for the existing one, during the interim audit somewhere in the middle of the financial yearThank you!
@kasiak not technically correct. Each jurisdiction has its own requirements in relation to the auditing guidelines for statutory auditors. In the UK for instance, the FRC mandates statutory audits be conducted under ISAs (UK).
In the United States they don’t call them ISAs.. The PCAOB has the auditing standards (AS) which are required for public audits and AICPA has the SAS which are guidelines for non-public audits. However the AS are required for public audits.
With reference to the Kaplan book, it is written for the particular jurisdiction to which it applies, unless it is P7 International, in which case, the assumption is that the jurisdiction has adopted ISAs as issued by the IFAC.
Risk assessment is performed throughout the audit engagement, prior to taking on a client and subsequently prior to each continuing engagement.
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