SA-200 Overall Objectives of the Independent Auditor & the conduct of an audit in accordance

with SAs SA-200

Management Audit Auditor

(For whom the audit is conducted- Also (Independent Examination of Financial (Individual person or firm who conducts
known as Auditee) Statements) the process of Audit)

Requirements from Management

(Responsibilities) Purpose Scope Conduct Limitations Objectives Requirements
1. Preparation and Presentation of
Financial Statements
2. The Design, implementation &
The scope of an audit is Conduct of an audit in Inherent Limitations of 1. To obtain reasonable
maintenance of internal control.
determined by: accordance with SAs: Audit: assurance about whether
3. To provide the auditor with all the
the financial statements as a
necessary information and 1. The terms of the The auditor shall comply 1. Nature of Financial whole are free from material
explanations. engagement. with all requirements of Reporting (Lack of misstatement thereby
2. The requirements SAs which are relevant Qualitative aspects) enabling the auditor to
of relevant to the audit unless 2. Nature of Audit express an opinion on
1. To enhance the degree of confidence of legislation. Procedure (E.g. whether the FS are prepared
intended users 3. The 1. The Entire SA is not Sampling) in accordance with an
2. To form an opinion on the true and fair pronouncements relevant 3. Need of conducting Acceptable Financial
view of the framework of the Institute. 2. The requirement is the audit with a reporting framework.
3. To provide an opinion on other specific 4. The legal not relevant and is reasonable time and 2. To report on the FS and
matters required under applicable laws judgments given conditional and the at reasonable cost. communicate as required by
and regulations. by various courts condition does not 4. Nature of Audit the SAs in accordance with
of law. exist. Evidence. auditor’s findings.

Notes: To obtain reasonable assurance, the auditor shall Professional Skepticism: An attitude that includes (a) 1. Ethical Requirements comprise
obtain sufficient appropriate audit evidence to reduce the Questioning mind (b) Being alert to conditions that may indicate of Code of Ethics issued by
audit risk to an acceptably low level. possible mis-statement due to error (c) A critical assessment of ICAI- Integrity, Objectivity,
audit evidence . Professional Competence and due
An auditor cannot obtain absolute assurance because of care, confidentiality, professional
the inherent limitations of an audit. (Already mentioned Professional Judgment: It is necessary in arriving at decisions behaviour and independence.
above). regarding- (a) Materiality & Audit Risk (b) Audit procedures to 2. Professional Skepticism
be adopted for obtaining sufficient & appropriate audit evidence 3. Professional Judgment
“Audit Risk”-The risk that auditor may give inappropriate (c) Conclusions based on the audit evidence obtained
audit opinion when FS are materially misstated. (d) Financial reporting framework prepared by Mgt.
Written by:

Harpreet Singh Bedi

(Articled Assistant)