Standards on Auditing- SA 200

SA 200 establishes the independent auditor’s overall responsibilities and explains the nature and scope of an audit when conducting an audit of Financial statements in accordance with SA’s.

Overall objectives of the Auditor:

In conducting an audit of Financial statements, the overall objectives of the auditor are:

(a) To obtain reasonable assurance about whether the Financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the Financial statements are prepared, in all material respects, in accordance with an applicable Financial reporting framework; and

(b) To report on the Financial statements, and communicate as required by the SA’s, in accordance with the auditor’s Findings.

Ethical requirements, professional skepticism, professional judgement and SAAE & audit risk :

The auditor shall:

1. Comply with ethical requirements including independence.

2. Plan & perform an audit with professional skepticism.

3. Exercise professional judgement in planning & performing an audit of Financial statements.

4. Obtain sufficient appropriate audit evidence to reduce audit risk to an acceptably low level.

Conduct of an Audit in accordance with SA’s :

A) The auditor shall:

1. Comply with all SA’s relevant to the audit.

2. Have an understanding of the entire text of SA, including its application & other explanatory material.

3. Not represent compliance with SA’s in the auditor’s report unless the auditor has complied with the requirements of this SA & all other SA’s relevant to the audit.

B) To achieve the overall objectives, the auditor shall use the objectives stated in the relevant SA’s in planning & performing the audit.

C) The auditor shall comply with each requirement of an SA unless, in the circumstances of the audit:

(a) The entire SA is not relevant; or

(b) The requirement is not relevant because it is conditional and the condition does not exist.

In exceptional circumstances, the auditor may judge it necessary to depart from a relevant requirement in an SA. In such circumstances, the auditor shall perform alternative audit procedures to achieve the aim of that requirement.

D) If an objective in a relevant SA cannot be achieved, the auditor shall evaluate whether this prevents the auditor from achieving the overall objectives of the auditor and thereby require the auditor to modify the opinion or withdraw from the engagement.