[X] Close
[X] Close
Home » » APPLICABILITY OF SA 700, FORMING AN OPINION AND REPORTING ON FINANCIAL STATEMENTS, TO FORMATS OF AUDITOR’S REPORTS PRESCRIBED UNDER VARIOUS LAWS AND/ OR REGULATIONS

APPLICABILITY OF SA 700, FORMING AN OPINION AND REPORTING ON FINANCIAL STATEMENTS, TO FORMATS OF AUDITOR’S REPORTS PRESCRIBED UNDER VARIOUS LAWS AND/ OR REGULATIONS

1. The Council of ICAI, at its 326th meeting held from 27th to 29th July 2013 considered the issue relating to application of Standard on Auditing (SA) 700¸ Forming An Opinion And Reporting on Financial Statements to such cases where the format of the auditor’s report is prescribed under the relevant law or the regulation there under and are per se not in line with the requirements of SA 700. The Council noted that in many cases such prescribed auditor’s report were required to be filed online in a preset form and, hence, it was not possible for the auditors to make necessary changes in these reports to bring them in line with the SA 700. Similarly, many a times, even where the auditor’s report were to be submitted in a physical form and not filed online, the concerned regulatory/government agencies may not accept such audit reports which contained any changes made by the auditors to the prescribed formats to bring them in line with SA 700.

2. In view of the above, the Council decided that while the matter was being taken up by the Institute with the relevant regulatory authorities/ Government agencies, etc., to change the prescribed formats for bringing the same in line with the requirements of SA 700, the members may, in the situations described in paragraph 1 above, submit the auditor’s report in the format/s prescribed under the relevant law or regulation until announcement of necessary change is made by the appropriate authority. In such cases the members would not be viewed as having not complied with the provisions of SA 700.

3. In this context, it may also be noted that paragraph A55 of the SA 200, Overall Objectives of the Independent Auditor and the Conduct of An Audit in Accordance With Standards on Auditing clearly states as follows:
“A55. In performing an audit, the auditor may be required to comply with legal or regulatory requirements in addition to the SAs. The SAs do not override laws and regulations that govern an audit of financial statements………………….”

4. Further, paragraph 43 of SA 700 requires that if the auditor is required by any law or regulation to use a specific layout or wording of the auditor’s report, the auditor shall refer to Standards on Auditing only if the auditor’s report includes, at minimum, each of the elements as prescribed in the said paragraph.

5. On a perusal of a cross section of the formats of the auditor’s report prescribed under various laws, specially, the Income-tax Act, 1961 and the Value Added Tax Acts of various States, it is clear that these prescribed formats do not contain all the elements of the auditor’s report as required in paragraph 43 of SA 700. In the background of the difficulties mentioned in paragraph 1 above, it may also not be possible for the auditors to suitably modify the prescribed format. Accordingly, it would not per se be possible for the auditors to state in their audit reports that the audit has been carried out in accordance with the Standards on Auditing. However, the auditors would be required to carry out the audits in accordance with the Standards on Auditing issued by the


Institute of Chartered Accountants of India

0 comments:

Post a Comment

Blog Archive

Search This Blog

Subscribe via email

Enter your email address:

Delivered by FeedBurner

Recommend us on Google!
-->