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The document discusses considerations for auditing special purpose financial statements. It notes that the auditor must comply with all relevant auditing standards and determine if any special considerations are needed. The auditor must understand management's selection and application of accounting policies, including any significant interpretations of contracts used in preparing the financial statements. When forming an opinion and reporting, the auditor must apply the standards for audited financial statements. The report must also describe the purpose and intended users of the special purpose financial statements.

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Jerome Eziekel Posada Panaligan
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52 views2 pages

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The document discusses considerations for auditing special purpose financial statements. It notes that the auditor must comply with all relevant auditing standards and determine if any special considerations are needed. The auditor must understand management's selection and application of accounting policies, including any significant interpretations of contracts used in preparing the financial statements. When forming an opinion and reporting, the auditor must apply the standards for audited financial statements. The report must also describe the purpose and intended users of the special purpose financial statements.

Uploaded by

Jerome Eziekel Posada Panaligan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Considerations When Planning and Performing the Audit

9. PSA 200 (Revised and Redrafted) requires the auditor to comply with all PSAs

relevant to the audit.4

In planning and performing an audit of special purpose

financial statements, the auditor shall determine whether application of the PSAs

requires special consideration in the circumstances of the engagement.

(Ref: Para. A9-A12)

10. PSA 315 (Redrafted) requires the auditor to obtain an understanding of the

entity’s selection and application of accounting policies.5

In the case of financial

statements prepared in accordance with the provisions of a contract, the auditor

PSA 200 (Revised and Redrafted), “Overall Objectives of the Independent Auditor and the Conduct of an

Audit in Accordance with Philippine Standards on Auditing,” paragraph 13(a).

[PSA 210 (Redrafted), “Agreeing the Terms of Audit Engagements,” paragraph [to be inserted].]

PSA 200 (Revised and Redrafted), paragraph 18.

PSA 315 (Redrafted), “Identifying and Assessing the Risks of Material Misstatement Through

Understanding the Entity and Its Environment,” paragraph 11(c).

PSA 800 (Revised and Redrafted)

shall obtain an understanding of any significant interpretations of the contract that

management made in the preparation of those financial statements. An


interpretation is significant when adoption of another reasonable interpretation

would have produced a material difference in the information presented in the

financial statements.

Forming an Opinion and Reporting Considerations

11. When forming an opinion and reporting on special purpose financial statements,

the auditor shall apply the requirements in PSA 700 (Redrafted).6

(Ref: Para. A13)

Description of the Applicable Financial Reporting Framework

12. PSA 700 (Redrafted) requires the auditor to evaluate whether the financial

statements adequately refer to or describe the applicable financial reporting

framework.7

In the case of financial statements prepared in accordance with the

provisions of a contract, the auditor shall evaluate whether the financial statements

adequately describe any significant interpretations of the contract on which the

financial statements are based.

13. PSA 700 (Redrafted) deals with the form and content of the auditor’s report. In

the case of an auditor’s report on special purpose financial statements:

(a) The auditor’s report shall also describe the purpose for which the financial

statements are prepared and, if necessary, the intended users, or refer to a

note in the special purpose financial statements that contains that

information; and

(b) If management has a choice of financial reporting frameworks in the

preparation of such financial statements, the explanation of management’s8

responsibility for the financial statements shall also make reference to its

responsibility for determining that the applicable financial reporting

framework is acceptable in the circumstances.

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