MODULE 1- INTRODUCTION – PART 4
ACCOUNTING STANDARDS
MEANING AND DEFINITION
Auditing standards are a set of systematic guidelines used by auditors
when conducting audits on companies' financial records, ensuring the
accuracy, consistency and verifiability of auditors' actions and reports.
It provides minimum guidance for the auditor that helps him to
determine the extent of audit steps and procedures that should be
applied to fulfil the audit objectives.
Auditing Standards may be defined as, "a set of systematic guidelines
which guide, the auditor to help him in determining the extent of audit
steps and procedures that should be applied to fulfill the audit
objectives".
INTERNATIONAL AUDITING AND ASSURANCE
STANDARD BOARD (IAASB)
With a view to achieve harmony and quality in the profession of auditing at international level,
International Auditing and Assurance Standard Board (IAASB) has been established by
International Federation of Accountants (IFAC) to develop and issue high quality auditing standards
to be used throughout the world.
Objectives of IAASB
Establishing high quality auditing standards in regard to audit of financial statements.
Establishing high quality standards for other tasks of assurance services of financial and non-
financial and related services.
Establishing high quality standards for quality control of services.
Publishing of pronouncements on auditing and assurance matters.
ROLE OF AUDITING AND ASSURANCE
STANDARDS BOARD IN INDIA (AASBI)
The Institute of Chartered Accountants of India has constituted Auditing and
Assurance Standards Board (AASB) in India.
The main function of the Board is to review existing auditing practices in
India and to develop Standards of Auditing (SA) which may be issued by the
ICAL.
The AASB takes into account international auditing guidelines issued by
International Auditing and Assurance Standards Board (IAASB), which are
integrated with conditions and practices prevailing in India.
The AASB has the representatives of society and other interested groups
OBJECTIVES AND FUNCTIONS OF AASB1
Reviewing of existing and emerging audit practices throughout the world.
Formulation of Standard of Auditing (SA), Standards of Review Engagement (SRE).
Standards on Assurance Engagement (SAE), Standards on Related Services (SRS) and
Standards on Quality Control (SQC).
Reviewing of existing standards and statement on Auditing.
Developing Guidance Notes.
Reviewing and revising existing Guidance Notes.
Formulating general clarifications wherever necessary.
Formulating and issuing Technical Guides, Practice Manuals, Study materials, etc.
PROCEDURE FOR SETTING AND ISSUING
STANDARDS ON AUDITING
The following procedures are adopted for the formulation of Standards on Auditing:
AASB: The Auditing and Assurance Standard Board determines the broad areas in which the
standard on auditing need to be formulated
Study groups: In the presentation of Standards on Auditing's (SAs) the AASB is assisted by study
groups constituted to consider specific subjects.
Exposure Draft: On the basis of the work of the study groups, an Exposure Draft of the proposed
SA is prepared by the AASB and issued for comments from members of ICAI.
Finalization of Standard: After taking into consideration the comments received, the draft of the
proposed SA is finalized by the AASB and submitted to the Council of ICAL
Issue of SA: The Council of ICAI will consider the Final Draft of the proposed SA, and if necessary,
modify the same in consultation with the AASB. The SA is issued under the authority of Council.
THE END
Thank you……
Surabhi Sadan
Assistant Professor
Pavanatma college, Murickassery
