At its meeting in February, the International Auditing

and Assurance Standards Board (IAASB) agreed to advise

auditors that reports for special purpose audit engagements
can, with appropriate amendments, be issued in the form
of the illustrative report in paragraph 60 of International
Standard on Auditing (ISA) 700, The Independent Auditors
Report on a Complete Set of General Purpose Financial
Statements.
To enhance the transparency and comparability of auditors
reports across international borders, the IAASB conducted
a comprehensive revision of ISA 700 and issued a revised
standard in December 2004. The revised standard, which is
effective for auditors reports dated on or after December
31, 2006, establishes a new form of report.
The IAASB also revised extant ISA 800, The Independent
Auditors Report on Special Purpose Audit Engagements.
This revision included amending the requirements for
the auditors report, in order to be consistent with revised
ISA 700. The IAASB approved ISA 800 (Revised), Special
ConsiderationsAudits of Special Purpose Financial State-
ments and Specic Elements, Accounts or Items of a Financial
Statement in October 2006; however, the revised standard
is currently being redrafted in the IAASBs clarity style,
and will not become effective at a date earlier than
December 15, 2008.
Consequently, during the period until revised ISA 800
is issued and becomes effective, auditors following the
guidance and illustrative reports in the respective ISAs
will issue different forms of report as a result of an audit,
depending on whether the nancial statements are general
purpose or special purpose.
The IAASB has been asked whether, pending the release
of revised ISA 800, it is permissible to issue an auditors
report for a special purpose audit engagement in the form
of the illustrative report in revised ISA 700. Extant ISA 800
remains in force and it is necessary for auditors to comply
with it. The IAASB is, however, of the view that auditors
reports for special purpose audit engagements drafted in
the form of the illustrative report in revised ISA 700 could
comply with the requirements of extant ISA 800.
It is important to note that revised ISA 700 deals with
an auditors report on a complete set of general purpose
nancial statements prepared in accordance with a fair
presentation framework.
1
Extant ISA 800, however, deals
with an auditors report on:

A complete set of nancial statements prepared in

accordance with an other comprehensive basis of
accounting;

A component of a complete set of general purpose
or special purpose nancial statements, such as
a single nancial statements, specied accounts,
elements of accounts, or items in a nancial
statement; and

Compliance with contractual agreements.

The illustrative report in revised ISA 700 therefore has to
be tailored to reect the circumstances of the particular spe-
cial purpose audit engagement. For example, if the
applicable nancial reporting framework is a compliance
framework, the description of managements responsibili-
ties for the nancial statements does not refer to the prepa-
ration and fair presentation of the nancial statements.
AUDITORS REPORTS ON SPECIAL PURPOSE AUDIT ENGAGEMENTS
INTERNATIONAL AUDITING AND ASSURANCE STANDARDS BOARD
I A A S B
APRIL 2007/02
The IAASB is an independent standard-setting board of the International Federation of Accountants.
1 Some nancial reporting frameworks acknowledge explicitly or implicitly that, to achieve fair presentation of the nancial statements, it may be necessary
for management to provide disclosures beyond the specic requirements of the framework; or acknowledge explicitly that, in extremely rare circumstances,
it may be necessary for management to depart from a specic requirement of the framework to achieve fair presentation of the nancial statements. For
purposes of the ISAs, such frameworks are referred to as fair presentation frameworks. Financial reporting frameworks that encompass primarily the
nancial reporting standards established by an organization that is authorized or recognized to promulgate standards to be used by entities for preparing
and presenting general purpose nancial statements are often designed to achieve fair presentation, for example, International Financial Reporting Standards
(IFRSs). Other nancial reporting frameworks only require compliance with the specic requirements of the framework. For purposes of the ISAs, such
frameworks are referred to as compliance frameworks.
1
The word fair is omitted. The description refers to the
applicable nancial reporting framework or a note in the
nancial statements that describes the framework. Further,
in the case of a compliance framework, the auditors opin-
ion does not contain the phrases give a true and fair view
of or present fairly, in all material respects.
ISA 800 (Revised), which is currently being redrafted,
contains illustrations of auditors reports for special purpose
audit engagements. Although not yet effective, auditors may
nd these illustrations helpful when they decide to issue ex-
tant ISA 800 auditors reports in the form of the illustrative
report in ISA 700. These illustrations can be found at http://
www.ifac.org/IAASB/Meeting-FileDL.php?FID=2692.
About the IAASB
The objective of the IAASB, an independent standard-
setting board within the International Federation of
Accountants, is to serve the public interest by setting high
quality auditing and assurance standards and by facilitating
the convergence of international and national standards,
thereby enhancing the quality and uniformity of practice
throughout the world and strengthening public condence
in the global auditing and assurance profession. The Public
Interest Oversight Board oversees the activities of the IAASB
and, as one element of that oversight, establishes the criteria
for its due process and working procedures.
Key Contacts
John Kellas, Chairman
(johnkellas@ifac.org)
Jim Sylph, Executive Director, Professional Standards
(jimsylph@ifac.org)
Alta Prinsloo, IAASB Deputy Director
(altaprinsloo@ifac.org)
INTERNATIONAL AUDITING AND ASSURANCE STANDARDS BOARD
545 Fifth Avenue, 14th Floor, New York, NY 10017 USA
Tel +1 (212) 286-9344 Fax +1 (212) 286-9570 www.ifac.org email: pr@ifac.org
International Federation of Accountants
INTERNATIONAL AUDITING AND ASSURANCE STANDARDS BOARD
2