home » Terms » The developer of international auditing standards is. Audit Standards

The developer of international auditing standards is. Audit Standards

1. Appointment of International Standards on Auditing (ISA). Basic principles of ISA

international standard audit

The emergence of International Auditing Standards is due to the process of reforming the accounting system in Russia, the transition of domestic accounting practices to international accounting and reporting standards. As a result, there was a need for knowledge of international auditing standards.

In the conditions of the enterprise market, credit institutions, other business entities enter into contractual relations for the use of property, Money, commercial transactions and investments. The trust in these relationships should be supported by the ability for all participants in transactions to receive and use financial information.

The reliability of the information is confirmed by an independent auditor. Often, owners and, above all, collective owners - shareholders, shareholders, as well as creditors are deprived of the opportunity to independently verify that all the numerous operations of an enterprise, often very complex, are legal and correctly reflected in the statements, since they usually do not have access to accounting records. records, no relevant experience, and therefore require the services of auditors.

Independent confirmation of information about the results of enterprises and their compliance with the law is necessary for the state to make decisions in the field of economics and taxation, as well as for courts, prosecutors and investigators to confirm the reliability of financial statements of interest to them.

The need for the services of an auditor arose in connection with the following circumstances:

the possibility of receiving biased information from the administration in cases of conflict between it and users of this information (owners, investors, creditors);

the dependence of the consequences of the decisions made (they can be very significant) on the quality of the information;

the need for special knowledge to verify information;

frequent lack of access for users to access information to assess its quality.

All these prerequisites have led to the emergence of a public need for the services of independent experts who have the appropriate training, qualifications, experience and permission to provide such services.

For high-quality and successful conduct of audit services, it becomes necessary to apply uniform audit rules (standards) in audit practice.

Standard (from the English. Standard) - sample, model, i.e. a set of generally accepted requirements for the work of the auditor, which are of a uniform nature regardless of the areas of activity and regulate the basic principles and features audit activity.

International Standards audit (ISA) is a collection of documents, united by an idea that determines the direction of the entire ISA system. Such an idea is, the need in the course of the audit, providing a certain level of assurance.

Confidence is the one general criterion, which, in accordance with ISA, underlies a particular type of verification and the level of responsibility for its results.

International Standards on Auditing are built systematically, have the same structure, each section is equally important and, accordingly, should be considered as a single integrated structure. ISAs are intended to be used in the provision of various audit services, including the audit of financial statements, the audit of other information and the provision of related audit services.

The ISAs detail all the requirements to be met during an audit; how to plan work, get to know the client's business properly, learn accounting systems and internal control, also determines the degree of materiality for errors, explains how to collect and evaluate audit evidence, conduct random checks, and finally make audit reports.

The application of standards is a kind of guarantee of the quality of audit services.

The International Federation of Accountants (IFAC), an international professional accounting and audit organization, is directly involved in the development, implementation and promotion of these standards.

The audit should be planned and carried out by the auditor in accordance with the ISA, which contains the main principles, necessary procedures and related recommendations in the form of explanatory material.

The main principles of the ISA are regulated in the section "Basic principles and responsibilities" (200-299).

The audit principles can be grouped as follows:

) the principles that distinguish between audit and audit-related services;

a) ethical principles;

) professional basic principles for auditing financial statements.

In the first group, there are three principles that characterize the difference between an audit and related services , which are disclosed in the ISA:

the nature of the service;

the level of assurance provided by the auditor;

type of report provided.

Related services include:

review checks;

agreed procedures;

drawing up reports.

When fulfilling their professional duties the auditor should be guided by ethical principles, which constitute the second group of principles:

independence;

decency, honesty;

objectivity;

professional competence and due diligence;

confidentiality;

professional conduct;

adherence to technical standards.

The third group - basic professional principles- related to the content and methodology of the audit. It includes the following principles:

materiality;

reasonable certainty;

division of responsibility;

documentation;

evidence;

spot check;

understanding the activities of the entity being audited;

professional skepticism;

unification.

The auditor should conduct the audit in accordance with the ISAs, which contain the basic principles and necessary procedures, as well as related guidance, presented in the form of explanatory and other material.

2. Identifying and assessing the risks of material misstatement through understanding the activities of the entity and its environment. Auditor's actions in accordance with the assessed risks

The auditor is required to assess the risks of material misstatement in the financial statements based on knowledge of the entity and its environment, including the internal control system of the subject of ISA 315 “Detecting and assessing the risks of material misstatement through understanding the activities of the company being audited”.

The purpose of this International Standard on Auditing (ISA) is to establish requirements about what is meant by business knowledge, why it is important for the auditor and audit personnel working on an engagement, why it applies to all stages of the audit, and how the auditor acquires and applies this knowledge.

When performing an audit of financial statements, the auditor should have (or obtain) knowledge of the business to the extent that it can identify and understand events, transactions and practices that, in the auditor's judgment, could have a significant effect on the financial statements, either on the audit or on audit report (conclusion).

The standard under consideration contains requirements in terms of:

) risk assessment procedureswhich provide a basis for assessing the risks of material misstatement at the financial statement and assertion levels. Obtaining knowledge of the subject and its environment, including the internal control system, is continuous process collecting, updating and analyzing information throughout the audit.

The auditor should perform a number of risk assessment procedures:

requests to management who have information that can help identify risks of material misstatement;

analytical procedures;

observation and inspection.

auditor's actions.As a result, based on the acquired knowledge, the auditor plans the audit and expresses professional judgment during the audit. In accordance with ISA 315, the auditor considers whether the available information is relevant to identifying the risks of material misstatement and whether the entity's financial statements are prone to material misstatement.

) necessary knowledge of the subject and its environment, including the internal control system of the subject, begins with the receipt general idea about the subject and the environment in which he carries out his economic activity.

The auditor should obtain an understanding of the following:

industry, regulatory and other external factors, including the applicable financial reporting framework;

the nature of the subject (operations, property, types of investments);

goals and strategies of the entity, as well as associated business risks;

the entity's choice and application of accounting policies, whether they are appropriate for its business and consistent with the applicable financial statements;

assessment and review financial results.

The control environment includes the functions of management, leadership and its importance to the subject.

auditor's actions.In assessing the control environment, the auditor should obtain an understanding of:

a) whether management maintains and establishes an entity under the control of those charged with governance;

b) do they provide strengths elements of the control environment as a basis for other components of internal control, and whether deficiencies reduce the effectiveness of other components.

The risk assessment process used by the entity. How the management of the entity determines the risks.

auditor's actions.Get an idea of whether the subject has a process:

a) to identify business risks;

b) assessing the significance of risks;

c) estimates of the probability of their occurrence;

d) making decisions about actions in response to such risks.

As a result, the auditor has two options:

the subject has established a risk assessment process and obtain an understanding of such a process;

the entity has not established a risk assessment process and discuss with management whether business risks arise and whether they are significant for financial reporting purposes.

Information system, including relevant business processes related to the preparation and presentation of financial statements, and the exchange of information (classes of transactions; procedures used to record, process, adjust transactions and transfer them; the process of preparing and presenting financial statements; controls related to unauthorized entries).

auditor's actions.The auditor should obtain an understanding of how the entity communicates information, including communications between management and those charged with governance. ;

Control actions are policies and procedures that help ensure that the subject's directives are followed.

auditor's actions.The auditor should obtain an understanding of the control activities that are significant to the audit;

Monitoring of controls, the process of assessing the effectiveness of the functioning of the internal control system over a certain period of time.

auditor's actions.The auditor should obtain an understanding of reasonable actions to monitor internal controls over financial reporting.

) Identification and assessment of the risks of material misstatementto provide a basis for developing and performing further audit procedures:

at the level of financial reporting;

approval level for transaction classes, account balances, and disclosures.

auditor's actions.The auditor should determine whether any of the identified risks is significant by considering the following questions:

whether the risk is a fraud risk;

whether the risk is associated with recent significant events in the field of economics, accounting;

whether the risk is associated with significant transactions with related parties;

about the degree of subjectivity in assessing financial information related to risk;

whether the risk is associated with significant transactions that are outside the normal economic activity subject.

If the auditor has determined that a significant risk exists, the auditor should obtain an understanding of the entity's controls.

) Documentation, which should reflect:

discussion with the project team, as well as the decisions made;

the key elements of knowledge obtained in relation to each aspect of the entity and its environment, as well as in relation to the system of internal control;

identified and assessed risks of material misstatement at the financial statement and assertion levels;

identified risks and related controls of which the auditor has gained knowledge.

3. Task 10

The audit program contains a list of procedures for checking cash transactions, presented in the table (column 1). The procedures should be aimed at checking the elements of the prerequisites for the preparation of accounting (financial) statements (column 3):

Audit procedure Designation of connection column 1 and 3 Prerequisite 1. Checking the correctness of filling in the article “Labor costs” of the table “Expenses for ordinary activities (by cost elements)” 1-71. Existence2. Checking the correctness of the calculation and withholding of the amounts of personal income tax2-62. Rights and obligations3. Availability check employment contracts with the personnel of the enterprise3-23. Emergence4. Verification of the signature of the head of the enterprise on orders related to hiring, dismissal, transfer to another job of employees of the enterprise, etc. 4-34. Completeness5. Checking the completeness of the reflection in the accounting of the amounts accrued for payment to employees for all reasons5-45. Valuation6. Conducting an inventory of the amount of the reserve for the upcoming payment of vacations to employees6-16. Precise measurement7. Verification of compliance by the enterprise with the established collective agreement provisions on bonuses to employees and wages established by the staffing table7-57. Presentation and disclosure

Exercise:graphically (arrows through column 2) or numbers (for example, "1-4") show, to obtain reasonable assurance about which elements of the assertions of the financial statements, each of the listed audit procedures is performed.

Bibliography

Main

1. International Auditing Standards / Ed. J.A. Kevorkova.- M.: Yurayt, 2013.

Additional

1. Arkharova Z.P. International auditing standards: textbook.-method. allowance. - M. Ed. center EAOI, 2011.

Bychkova, S.M. International auditing standards: textbook. allowance / S.M. Bychkova, E.Yu. Itygilova; ed. CM. Bychkova. - M.: Prospect, 2008.

3. International auditing standards: textbook / S.V. Pankova, N.I. Popov. - 3rd ed., with rev. - M.: Master, 2009.

Tutoring

Need help learning a topic?

Our experts will advise or provide tutoring services on topics of interest to you.
Submit an application indicating the topic right now to find out about the possibility of obtaining a consultation.

Auditing standards are divided into international (ISA) and national. International Standards on Auditing (ISA) - international professional standards for the implementation of audit activities. They are issued by the International Federation of Accountants through the International Auditing and Assurance Standards Committee. ISA is a relatively new independent course, the emergence of which is due to the process of reforming the accounting system in Russia, the transition of domestic accounting practice to international accounting and reporting standards.

As a result, there was a need for knowledge of international auditing standards. The development of audit in our country and the adoption of the Federal Law "On Auditing" necessitated a revision of the audit rules that we have in our country in order to transform them into regulations federal level. The legislation provides for the creation of internal rules (standards) by professional audit associations. Today, when licensing audit organizations, special attention is paid to the quality of services, which is impossible without standardization.

In this regard, interest in audit methodology has increased and the need for audit professionals to master international auditing standards and provisions on international audit practice has increased. The International Federation of Accountants, which organizes the work on the formation and implementation of international financial reporting and auditing standards, is doing a lot of work to improve the methodological work in the field of audits and the provision of related services. The study of international auditing standards is designed to help specialists of audit firms competently organize their work and improve its quality in order to more fully meet the needs of society for reliable information about financial condition and results of economic activity of audited companies.

Based on international standards in Russian Federation Federal Rules (Standards) of Auditing Activities have been developed to regulate auditing activities on its territory. The significance of the standards is that they - ensure the high quality of the audit; - promote the introduction of new scientific achievements into audit practice and help users understand the audit process; - eliminate the need for government control; - help auditors to negotiate with the client; - provide a link between individual elements of the audit process; - force auditors to constantly improve their knowledge and skills; - provide comparability of the quality of work of individual audit organizations; - streamline and facilitate audit work.

However, the audit rules are not detailed rules and regulations covering all audit work. They contain clear and concise summaries of the principles of auditing, as well as those established professional norms and rules that have proven their usefulness and strength in the course of auditing, supported by the experience of a huge number of auditors in different countries peace.

These standards subsequently received an international vocation. The audit rules (standards) and norms can be used by legal authorities as a guide, a guideline when considering the competence and work of the auditor.

In the 70s, under the leadership of the International Federation of Accountants, in order to improve the quality and unify the procedure for conducting audits around the world, the development of international auditing standards began, publishes international audit Council on International Standards on Auditing and Quality Assurance. International standards have a dual purpose: 1. to promote the development of the audit profession in countries where the level of professionalism does not correspond to the global level; 2. to unify auditing on an international scale. International Standards apply to the extent that, in exceptional cases, the auditor may deem it necessary to deviate from International Standards. This must be reasoned by the auditor. International auditing standards are divided into 7 groups: 1. introduction - the group is intended to determine general conditions or the main audit activity and this group of standards is not currently in force (100-199) 2. general principles and responsibilities (200-299) - the objectives and principles of the audit, as well as the circumstances in which certain responsibilities are assigned to the auditor and management of the entity being audited. 3. (300-499) "Risk assessment and responsible actions for assessed risk" - standards dedicated to audit planning, understanding the business of the enterprise, its environment, risk assessment, determining the level of materiality. 4. Audit evidence (500-599). These standards provide examples of verification procedures. These standards state that the auditor must obtain sufficient relevant evidence to enable a reasonable audit conclusion to be made. 5. Using the work of 3 persons (600-699). They regulate the procedure for the auditor's work with the information of 3rd persons. 6. audit conclusions and conclusions (700-799). The provision of these standards establishes the rules for the formation of audit conclusions and the preparation of an audit report. 7.special areas of audit (800-899) preparation of financial statements, the procedure for its provision. In accordance with accounting fundamentals that are different from international and national standards. The data of the standard determine the procedure for compiling and submitting a report on special audit assignments. 8. (1000-1999)

23. Intracompany auditing standards.

After preliminary negotiations and p / d the conclusion of the contract in accordance with the federal standards A of the activity “Agreement of the conditions for conducting A” and intra-company standards. According to the condition of conducting A, a letter is issued on conducting A, this document is sent a-m client and signed by the client's management in case of agreement with the main conditions of the assignment for conducting A. If A checks of this client are repeated for several years, then A org can decide not to draw up a new letter each time on conducting A.. Upon completion of the work done, in case of agreement conditions, a contract is concluded with the client for conducting an A check

Such standards are developed by major audit firms and are their intellectual property. The presence of intra-company standards facilitates audit work, improves its quality and unifies the working documentation of the company.

Intra-company auditing standards may consist of separate blocks, including standards for the internal structure of the company, organization of its activities, standards for checking the legal support of the client's activities, standards for auditing in separate sections, standards for checking economic entities with common features (small businesses, enterprises with foreign investments), standards for checking enterprises of certain industries and areas of activity.

Standards for conducting audits for individual sections include: a questionnaire or tests for the relevant section; a list of audit procedures and the sequence of their implementation;

typical test scheme:

1. List of regulatory documents.

2. Composition of primary documents.

3. Registers of analytical accounting.

4. Registers of synthetic accounting.

5. Forms, articles and tables of financial statements, which reflects the indicator being checked.

6. Description of alternative solutions, if any.

7. Classifier of possible violations.

One of the main criteria for evaluating the use of standards by auditors is the correctness of their development and application of internal audit rules. These documents, adopted and approved by auditors in order to ensure the effectiveness of practical work and its adequacy to national audit standards, are designed to regulate the requirements for its implementation and execution. Internal standards may provide additional framework for resolving conflicts that are possible between employees and the administration of an audit firm, auditors and clients, auditors and regulatory authorities. Internal rules define uniform requirements for the procedure for conducting an audit and its quality, and, if they are observed, create an additional level of guarantee of the results of the audit. These may include instructions adopted and approved by the organization, methodological developments, manuals and other documents that reveal the internal approaches of the company to the implementation of the audit.

FPSAD provided greater independence to auditors in solving individual problems during the audit. Many issues can be settled by audit organizations and individual auditors on their own and fixed by them in the internal audit rules. However, these rules should not contradict the FPSAD and their requirements cannot be lower than the requirements of federal and internal rules (standards) of the audit activity of a professional audit association, of which they are members ( the federal law No. 164-FZ).

In this regard, it seems to us that auditors and audit firms need an internal set of standards that define the approach to auditing. The use of internal standards helps to improve the quality of the audit, the effectiveness of its results, reduces the complexity of the work, allows the use of new technologies and methods of verification in audit practice.

Internal auditing standards provide a uniform approach to auditing in this audit firm, which (in one form or another) includes the following elements.

Preliminary review stage: 1) definition of the objectives of the agreement for reasonable and optimal planning; 2) an overview of the client's business; 3) an assessment of the degree of possible risk of fraud and common errors and an assessment of their significance; 4) an assessment of the internal control system to develop an audit strategy.

Working stage: 5) determination of the audit strategy and necessary procedures; 6) extended assessment of the effectiveness of the control system, development of an audit plan; 7) drawing up an independent survey plan; 8) conducting independent surveys. The final stage: 9) completion of the audit; 10) presentation of the conclusion.

Internal standards in accordance with the Rule (standard) of audit activity "Requirements for internal standards of audit organizations" and international experience, according to their purpose, can be combined into the following groups: - standards containing general provisions on audit; - standards that establish the procedure for conducting an audit; - standards that establish the procedure for the formation of conclusions and opinions of auditors; - specialized standards; - standards that establish the procedure for the provision of services related to the audit; - standards for education and training. Consider the standards that establish the procedure for conducting an audit. In them, the auditors reflect their approach to audit planning, the procedure for studying and evaluating the internal control system, obtaining audit evidence, determining the level of materiality, assessing audit risk, etc.

The main stages of audit planning are clearly defined in the relevant FPSAD No. 3 “Audit Planning”. When preparing an intracompany standard, auditors can more clearly present their actions at each stage of planning, including when obtaining knowledge about the financial and economic activities of an economic entity, which will be in demand both in the preparation of a general plan and program, and in the direct implementation of audit procedures. It is advisable for an audit firm to prepare in advance a possible audit plan and program in its internal documents, providing for the possibility of adjustment depending on the characteristics of the activities of the audited economic entities. Having reflected in the plan and program the maximum possible list of types of work and procedures, auditors can leave only suitable procedures for a specific audit, supplementing them with special actions that are specific only to the audited client. Separate provisions of the general plan and program may be agreed with the head of the economic entity.

When determining the procedure for studying and evaluating the internal control system in internal standards, auditors need to establish the number of stages, which, in accordance with the requirements of paragraph 5.1 of the PSAD “Studying and evaluating accounting and internal control systems during the audit”, cannot be less than three: general familiarity with system, an initial assessment of its reliability and confirmation of the reliability of the assessment (if necessary, auditors have the right to decide on the use of more stages).

When creating an internal standard, auditors need to keep in mind that forming an overall impression of an internal control system requires taking into account its components, i.e. an appropriate accounting system, control environment and individual controls. Finding out the reliability of each of them will allow us to evaluate the system as a whole.

Intracompany rules should also reflect the approach of the audit firm to determine the level of materiality. Possible options for its calculation are contained in FPSAD No. 4 “Materiality in Audit”, however, this internal standard of audit organizations is one of the most important. First of all, this is due to the need for the auditors to form and present in a certain form an opinion based on the results of the audit, containing an opinion on the reliability of the client's reporting data. As you know, the validity of reporting indicators should not be established by the auditor with absolute accuracy (it should be reliable in all material aspects). At the same time, difficulties arise in finding criteria for classifying misstatements as material. Auditing firms are trying to solve this problem by developing an appropriate internal rule.

The use of proven methods allows minimizing audit risk and conducting audits in a shorter time. For their development in an audit firm, a methodological council consisting of leading experts can be created. Intra-company standards can cover a wide range of issues - from methods for checking specific issues and directions in the field of accounting and taxation of economic entities to general issues of organizing audit work in a company.

Internal standards are subject to mandatory approval by the head of the audit organization. In order to ensure compliance with them, the need for the application of these rules should be included in functional responsibilities auditor.

Standard - an official state or regulatory technical document of an industry, enterprise, form that establishes the necessary quality characteristics, requirements that this type of product must satisfy.

Standards govern professional activity auditors and are widely recognized all over the world, as they allow to achieve the greatest objectivity in expressing an auditor's opinion on the compliance of financial statements with generally accepted principles of accounting and financial reporting, and also establish uniform quality criteria comparison of audit results. The uniformity of audit activity is its necessary condition due to the variety of methods used in audit practice, and the complexity of their comparison.

Auditing standards define uniform basic rules for the implementation of audits, uniform requirements for the quality and reliability of the audit. The use of auditing standards provides a certain level of guarantee of the reliability of the audit results.

On the basis of auditing standards, programs are formed for the training of auditors, as well as requirements for conducting examinations for the right to engage in auditing activities. Auditing standards are the basis for proving in court the quality of an audit and determining the degree of responsibility of auditors. The standards set general approach to the audit, the scope of the audit, the types of auditors' reports, the audit methodology, and the basic principles that all members of the profession should follow, regardless of the environment in which the audit is conducted. An auditor who allows deviations from the standard in his practice should be prepared to explain the reason for this.

Standards play an important role in auditing and audit activities because they:

ensure the high quality of the audit;
help users understand the audit process;
create a public image of the profession;
eliminate state control;
help the auditor to negotiate with the client;
provide a link between the individual elements of the audit process.

Auditing standards are the basis for proving in court the quality of an audit and determining the degree of responsibility of auditors. The standards define the general approach to conducting an audit, the scope of an audit, the types of auditors' reports, methodological issues, and the basic principles that all members of this profession must follow, regardless of the environment in which the audit is conducted. The Russian Auditing Standards have been developed on the basis of the International Standards on Auditing (ISA) issued by the International Federation of Accountants.

The system of standards in a generalized form includes international standards; national standards; internal company standards. Ultimately, the goal of the system of standards is achieved by the formation and application of a package of intra-company standards that detail and regulate uniform requirements for performing audits and issuing audit reports.

The value of the standards system is that it:

ensures the high quality of the audit;
promote the introduction of new scientific achievements into audit practice;
helps users understand the audit process;
provides a link between the individual elements of the audit process;
creates a public image of the profession.

International Auditing Standards

Russian Auditing Standards are based on International Standards (ISA). Development professional requirements at the international level, several organizations are involved, incl. The International Federation of Accountants (IFAC), established in 1977. Within the framework of IFAC, the International Committee on Auditing Practices (IAPC) deals with auditing standards.

The International Standards on Auditing (IAG) issued by the Committee have a dual purpose:

1) to promote the development of the profession in those countries where the level of professionalism is below the global level;

2) to unify, to the extent possible, the approach to audit on an international scale.

The system of international auditing standards includes more than 45 standards, grouped into several sections. International Auditing Standards are based on the following fundamental principles:

an audit can only be carried out by a person who has an auditor's certificate, i.e. a professional with sufficient work experience who has successfully passed the qualification exams;
the auditor must be independent of the client;
the auditor must comply with the Code of Professional Ethics in his activities;
The auditor should express an opinion in the auditor's report on the reliability of financial statements client.

4. Materiality in audit.

5. Audit evidence.

In the normative regulation of audit activities, the rules of verification occupy a significant place. The application of these in practice guarantees the quality of the audit. Most of the rules are based on international auditing standards.

Dear readers! The article talks about typical solutions legal issues but each case is individual. If you want to know how solve exactly your problem- contact a consultant:

APPLICATIONS AND CALLS ARE ACCEPTED 24/7 and 7 days a week.

It's fast and FOR FREE!

When planning an audit, many aspects need to be considered. The overall audit plan should be developed in as much detail as possible.

Following certain audit rules helps to take into account all the necessary nuances. These are based on a number of generally accepted international methods. What are the international auditing standards?

General information

Any auditing standards assume observance of fundamental principles.

These include:

Formulation of uniform standard requirements	Which establish requirements for the reliability and quality of the audit and create an appropriate guarantee level for the results of the audit procedures. However, auditing standards are subject to revision from time to time as economic conditions change.
Formation of curricula	Preparing auditors on the basis of standards and formulating uniform examination requests for obtaining permission to engage in audit activities
Determining Audit Quality	On the basis of accepted standards and the establishment of a measure of responsibility of any auditor
Predetermining a unified approach to the implementation of the audit	The scope of the audit, types of audit reporting, methodological issues and other basic principles

The need for auditing to harmonize standards at the international level has led to the development of international auditing standards.

Their use expanded the range of users of financial statements, simplified the comparison financial indicators activities of economic entities from different countries.

In general, international standards have made it possible to assess the professionalism and competence of audit firms at the interstate level.

What it is

International Standards on Auditing, or ISA for short, is a specific reference book for professional auditors. It describes generally accepted auditing techniques.

The use of international standards by Russian auditors in their work promotes integration into the international community.

Professional standards at the international level are developed by several associations. Among them, the IFAC is the International Federation of Accountants, which has been operating since 1977.

Specifically, audit standardization is in charge of CMAP, the Committee on International Auditing Practice, which is a permanent committee of the IFAC Council.

The main purpose of the created rules lies in professional development professions and unification of approaches to audit on an international scale.

The classification of international auditing standards involves the division into categories according to certain characteristics. As a rule, the main feature is the principle of logic.

Therefore, ISAs are divided into categories such as:

Introduction	Defines the conceptual framework for auditing and how an audit is conducted
Responsibilities	The duties of the auditor to the client are described, the procedure for concluding contracts is established, the need for confidentiality is determined
Planning	Prescribe the features of drawing up an inspection plan
Internal control system	Defines the principles of analysis of the accounting system and internal type of control
Audit evidence base	Regulates the list of documents required for verification and the degree of their reliability
Use of third party services	Establishes possible cases of involvement of third-party experts
Specialized areas of audit	Regulate the inspection of highly specialized areas
Accompanying services	Establish a list of services that the auditor can additionally offer

What is their role?

The significance of international auditing standards is that they contribute to:

ensuring High Quality audit;
implementation innovative technologies in audit methods;
users' understanding of audit procedures;
creating a public image of the profession;
elimination of increased control by the state;
simplification of interaction between the auditor and the client;
the relationship of individual audit processes.

International standards do not override government regulations that govern auditing in a particular country. ISA rules apply to the extent that they are similar to federal standards.

They also define the main role of standards international level how to ensure the proper level.

Therefore, auditors most often use a combination of federal and international standards.

The purpose of international auditing standards is to reduce differences in the interpretation of financial statements, improve the quality and comparability of information, unify standards.

Moreover, the standards are based precisely on principles, and not on strict rules. These are different from the national rules. The main postulate is to follow exactly the principles, and not to look for ways to circumvent the legislative norms.

Legal regulation

The first Russian-language edition of the ISA is dated 1999. But in this version there were many inaccuracies and errors. In addition, Russian developments based on this version did not coincide with the English version of 2000.

In 2001 was published new translation ISA, and it was he who was used by Russian developers in the preparation of new federal audit standards in the Russian Federation.

Initially, ISAs, developed in 1994, included forty-five standards. Individual countries have adopted international standards without changes as national standards.

Most of the states, including Russia, use the ISA as a methodological basis for creating national standards.

This approach helps to take into account international audit experience and interpret it in accordance with the national economy. This helps to improve the quality of the audit and increase the professional level of experts.

From 2019, the reliability of financial statements must be confirmed in accordance with ISA, regardless of the methods used to prepare reporting documentation.

Federal rules-standards of audit activity are approved at the government level.

Amendments dated December 1, 2014, made the application of international standards for Russian auditors mandatory.

Also in 2019, the SRO of auditors established requirements for the need to improve the qualifications of auditors on the subject of ISAs.

As for federal standards in Russia, they are established.

Many of the current standards are full or partial analogues of ISA. For example, the provision on understanding the activities of the entity being audited is Standard 8 and Standard 4 "Audit Materiality".

List of International Auditing Standards in 2019

The rules-standards of audit activity are documents that form the unity of requirements, compliance with which ensures an appropriate level of audit quality and additional related services.

On the given time the current forty-nine ISA standards are systematized into ten categories:

ISA 100-199	Introduction - determine the logic of the formation of standards and become the basis for the development of new norms. It covers basic terms, general prescriptions
ISA 200-299	Obligations - establish the circumstances of the audit order, the rules of contracts
ISA 300-399	Layout - predetermine the range of audited issues, the audit staff, the level of competence, the possibility of attracting third-party experts
ISA 400-499	Application of results - contribute to the evaluation of the information received
ISA 500-599	Audit evidence base - establish a list of documents required to draw up a reasoned audit report
ISA 600-699	Information from other persons - regulates the use of data from other auditors and coordinated work with the service internal audit
ISA 700-799	Audit conclusion - define the types of final conclusions and provide for the possibility of refusing to draw up an opinion in the absence of the necessary data
ISA 800-899	Special questions - help in forecasting upcoming financial information
ISA 900-999	Related activities - regulate the provision of additional services
IAPS 1000-1100	Supplements - consider aspects of international practice

Applied in Russia

All federal audit standards in the Russian Federation can be divided into three categories:

similar in content to ISA;
partly different from ISA;
having no mutual analogues with ISA.

At the same time, most of Russian standards is identical to ISA or has minor differences. The discrepancies are due to different approaches to audit and formal differences related to local characteristics.

Prior to 2005, the current RSAs were almost identical to the ISAs. Legislative reform has led to some inconsistencies.

It should also be noted that part of the ISA has no Russian analogues at all, since the regulation of audit in the Russian Federation is still under development.

However, some international standards are still similar to some Russian standards. This can be represented in the following table:

Compliance with ISA and PCA

Purpose of the standard	№ISA	№RSA
Agreement on the terms of the audit	210	12
Documentation during the audit process	230	2
Auditor's Responsibilities and Dealing with Fraud	240	13
Responsibilities for Compliance with Legislation	250	14
Audit planning	300	3
Obtaining information about the company's activities and assessing the risks of misrepresentation of information	315	15
Materiality in audit	320	4
Audit processes performed based on risk assessment	330	35
Acquisition of audit evidence	500	5
Obtaining Additional Audit Evidence	501	17
Receiving external confirmations	505	18
Features of the first audit of the entity	510	19
Analytical procedures	520	20
Audit sampling procedures	530	16
Audit report	700, 701, 800	6
Data mapping	710	26
Consideration of Other Information Not Used in the Auditor's Report	720	27

What are classified as intracompany

Internal auditing standards are assigned generally accepted requirements for the implementation of the audit and its quality. Auditing internal standards can be divided into the rules of audit SROs and directly internal.

Self-regulatory associations of auditors are free to develop their own standards, as well as create methods for the use of federal standards.

Auditing organizations and private auditors have the right to determine individual standards. Any internal company standards that an individual entity approves cannot override federal standards or the Audit Law.

In general, according to their purpose, internal standards are divided into:

concluding general provisions on audit;
predetermining the procedure for conducting an audit;
establishing the procedure for creating audit findings and final opinion;
resolving specific issues;
determining the procedure for providing additional;
regulating issues of education and training of personnel.

How federal regulations are characterized

In Russia, ISAs are taken into account when developing national standards. When developing standards, the Ministry of Finance takes into account the similarity of the tasks required to be solved.

At the stage of audit regulation in the Russian Federation, as a result, more than thirty all-Russian standards were created. They were not approved by the Government and were not standards.

However, the standards were approved by the Audit Commission and could be used as recommendations.

Determined that prior to the approval of federal standards, one should be guided by the approved all-Russian standards.

Subsequently, Government Decree No. 696 approved federal auditing standards. Thirty-three new standards are considered in Federal Law No. 307.

What is characteristic of them is that they all:

About internal audit

International standards on internal audit include three main groups of standards:

activities;
quality characteristics;
practical application.

Prior to the official regulation of internal audit in Russia, only international and intracompany standards were applied.

International Standard on Auditing (ISA) 230

"Audit Documentation"

International Auditing Standard ISA 230 "Audit Documentation" should be considered together with "The main objectives of an independent auditor and the conduct of an audit in accordance with the International Standards on Auditing".

Scope of this standard

1. This International Standard on Auditing (ISA) sets out the auditor's responsibilities for preparing audit documentation in an audit of financial statements. The Appendix lists other ISAs that contain specific documentation requirements and recommendations. These specific documentation requirements contained in other ISAs do not impose any restrictions on the application of this Standard. laws or regulations can be installed Additional requirements to documentation.

Nature and Purpose of Audit Documentation

2. Audit documentation that meets the requirements of this Standard and the specific documentation requirements contained in other applicable ISAs provides:

evidence substantiating the conclusion made by the auditor about the achievement of the main objectives of the auditor 1), paragraph 11.;

3. Audit documentation performs whole line additional features, including the following:

assisting the audit team in planning and conducting the audit;

assisting audit team members with control responsibilities in directing and supervising the audit work and in performing their review duties in accordance with ISA 2202) "Quality control during the audit of financial statements", paragraphs 15-17. ;

ensuring accountability of the audit team in its work;

maintaining data on matters that are significant for future audit engagements;

ensuring that quality control reviews and inspections are carried out in accordance with ISQC 1 3) , paragraphs 32-33, 35-38 and 48. or no less stringent requirements of national legislation 4) ISA 220, paragraph 2. ;

ensuring that external inspections can be carried out in accordance with applicable laws, regulations or other requirements.

Effective date

4. This standard effective for audits of financial statements for periods beginning on or after December 15, 2009.

Target

5. The objective of the auditor is to prepare documentation that provides:

sufficient and appropriate evidence to support the auditor's report;

evidence that the audit was planned and performed in accordance with International Standards on Auditing and applicable statutory and regulatory requirements.

Definitions

6. For the purposes of the International Standards on Auditing, the following terms have the following meanings:

audit documentation, working documentation, working papers - records of audit procedures performed, relevant audit evidence obtained and conclusions drawn by the auditor;

audit file - one or more folders, or other paper or electronic media intended for storing data, containing data representing audit documentation related to a specific engagement.

an experienced auditor is a person (who can be either an employee of the audit organization or a specialist outside of this organization) who has practical experience audit and a reasonable understanding of the following:
audit procedures;

International Standards on Auditing and applicable legal and regulatory requirements;

the business environment in which the audited entity operates;

audit and financial reporting matters relevant to the industry in which the entity operates.

Requirements

Timely preparation of audit documentation

7. The auditor should prepare audit documentation in a timely manner (Ref: Para. A1).

8. The auditor shall prepare audit documentation that is sufficient to enable an experienced auditor not previously involved in a particular audit engagement to understand (Ref: Para. A2–A5, A16–A17):

the nature, timing, and extent of the audit procedures performed to comply with International Standards on Auditing and applicable statutory and regulatory requirements (Ref: Para. A6–A7);

the results of the audit procedures performed and the audit evidence collected;

the significant matters that arose during the course of the audit engagement, the conclusions drawn therefrom, and the significant professional judgments used in reaching those conclusions (Ref: Para. A8–A11).

9. When documenting the nature, timing and extent of the audit procedures performed, the auditor should record:

what are the distinguishing characteristics of the articles or questions tested (see paragraph A12);

who performed the audit work, indicating the date on which such work was completed;

who reviewed the audit work performed, indicating the date and extent of such review (Ref: Para. A13).

10. The auditor should document discussions of significant matters with management, those responsible for corporate governance, including the nature of the issues discussed and when and with whom those discussions took place (Ref: Para. A14).

11. If the auditor has identified information that is inconsistent with the auditor's final conclusions about a significant matter, the auditor shall document how he resolved the inconsistency (Ref: Para. A15).

Derogation from any applicable requirement

12. If, in exceptional circumstances, the auditor deems it necessary to depart from an applicable requirement of an ISA, the auditor shall document how the alternative audit procedures performed by the auditor achieve the objectives of that requirement and the reasons for the departure. paragraphs A18–A19).

Matters Arising After the Date of the Auditor's Report

13. If, in exceptional circumstances, the auditor performs new or additional audit procedures or comes to new conclusions after the date of the auditor's report, the auditor shall document (Ref: Para. A20):

what are the circumstances he faced;

new or additional audit procedures performed, audit evidence collected and conclusions drawn, and their effect on the auditor's report;

when and by whom the relevant changes to the audit documentation were made and checked.

Final formation of the audit file

14. After the date of the auditor's report, the auditor shall promptly compile the audit documentation into an audit file and complete the administrative procedures for finalizing the audit file (Ref: Para. A21–A22).

15. Once the audit file is finalized, the auditor is prohibited from deleting or disposing of any audit documentation prior to its retention period (Ref: Para. A23).

16. If, in circumstances other than those described in paragraph 13, the auditor, upon completion of the finalization of the audit file, considers it necessary to modify the existing audit documentation or supplement it with new documents, he shall, regardless of the nature of the changes or additions, document the following (see paragraph A24):

specific reasons why changes or additions were required;

when and by whom they were introduced and verified.

Application guide and other explanatory materials

Timely Preparation of Audit Documentation (Ref: Para. 7)

A1. The timely preparation of sufficient and appropriate audit documentation helps to improve the quality of the audit engagement and facilitates the effective verification and evaluation of the audit evidence collected and the conclusions drawn before the audit report is finalized. Documentation prepared after the audit work has already been completed is likely to be less accurate than documentation prepared during the course of the audit work.

Documentation of audit procedures performed and audit evidence collected

A2. The form, content and extent of audit documentation depend on factors such as:

the size and complexity of the entity being audited;

the nature of the audit procedures performed;

identified risks of material misstatement;

the significance of the audit evidence collected;

the nature and extent of the identified discrepancies;

the need to document a particular conclusion or rationale for a conclusion that is not apparent from the work performed or the audit evidence obtained;

applied methodology and audit tools.

A3. Audit documentation may be kept on paper or on electronic or other media. Examples of audit documentation:

audit programs;

analytical documents;

aide-mémoires on problematic issues;

brief summaries of significant issues;

confirmation letters and written statements;

checklists;

correspondence (including electronic) on significant issues.

The auditor may include excerpts or copies of documents from the audited entity (for example, significant and specific contracts and agreements) in the audit documentation. Audit documentation, however, should not replace the entity's accounting records.

A4. The auditor is not required to include in the audit documentation the original draft working papers and financial statements, notes that reflect incomplete or preliminary considerations, original copies of documents that have been subsequently corrected due to typographical errors or other errors, and duplicate documents.

A5. Oral explanations by the auditor by themselves do not provide sufficient justification for the auditor's work or conclusions, but may be used to disclose and clarify information contained in the audit documentation.

Documentation of Compliance with International Standards on Auditing (Ref: Para. 8(a))

A6. In principle, compliance with the requirements of this Standard will result in audit documentation being sufficient and appropriate in the circumstances. To clarify the application of this ISA in the context of a particular ISA, such other auditing standard may contain clarifying documentation requirements. These specific documentation requirements contained in other ISAs do not impose any restrictions on the application of this Standard. Moreover, the absence of documentation requirements in any ISA does not mean that the implementation of such a standard does not involve the preparation of documentation.

A7. Audit documentation provides evidence that the audit performed complies with International Standards on Auditing. However, it is neither mandatory nor practicable for the auditor to document all matters considered or all professional judgments made during the audit. In addition, the auditor is not required to document separately (for example, in a checklist) the fact of compliance with those requirements, compliance with which is confirmed by documents attached to the audit file. For example:

the existence of a properly documented audit plan shows that the auditor planned the audit to be carried out;

the presence in the audit file of a signed engagement letter indicating the terms of the engagement indicates that the auditor has agreed the terms of the audit engagement with management or, if appropriate, with those charged with governance;

an auditor's report containing a properly qualified opinion on the client's financial statements indicates that the auditor has complied with the requirement to express a qualified opinion in the relevant circumstances described in ISAs;

A number of ways can be used to demonstrate compliance within the audit file with those requirements that normally apply throughout the audit:
for example, there may not be a single way to document an auditor's professional skepticism. However, audit documentation may provide evidence of the auditor's exercise of professional skepticism in accordance with International Standards on Auditing. Such evidence may include specific procedures performed to support management's responses to the auditor's inquiries;

The fact that the engagement partner has accepted responsibility for directing, controlling and performing the audit engagement in accordance with International Standards on Auditing can be evidenced in the audit documentation in a number of ways. In particular, this could be documentation of the timely involvement of the engagement partner in various aspects of the audit, such as participating in the engagement team discussions required by ISA 315 (Revised) 5) "Identification and assessment of the risks of material misstatement through the study of the organization and its environment", point 10. .

Documenting Significant Matters and Related Significant Professional Judgments (Ref: Para. 8(c))

A8. Assessing the significance of an issue requires an objective analysis of the facts and circumstances. Examples of significant questions:

matters giving rise to significant risks (as defined in ISA 315 (Revised)) 6), paragraph 4(e). ;

results of audit procedures that indicate that (a) the financial statements may be materially misstated or that (b) there is a need to revisit the auditor's previous assessment of the risks of material misstatement and the auditor's response to those risks;

circumstances that make it difficult for the auditor to apply the necessary audit procedures;

remarks that may lead to some modification of the auditor's opinion or to the inclusion in the auditor's report of the section "Important circumstances".

A9. An important factor when determining the form, content and scope of audit documentation on significant issues, the extent to which professional judgment is applied in the performance of work and in evaluating their results. Documentation of the professional judgments made, if they are significant, helps to clarify the auditor's conclusions and improve the quality of the judgment. These issues are of particular interest to those responsible for reviewing audit documentation, including those involved in subsequent audit engagements when they are dealing with matters that remain significant (for example, when performing a retrospective review of accounting estimates).

A10. Some examples of circumstances in which paragraph 8 would require audit documentation to be prepared regarding the use of professional judgment include the following when matters and judgments are significant:

the rationale for the auditor's conclusion when the auditor is required to consider certain information or factors and that consideration is relevant in the context of the audit being performed;

the basis for the auditor's conclusion regarding the validity of certain areas of subjective judgments (for example, regarding the validity of significant estimated values);

the basis for the auditor's conclusion on the authenticity of the document, when during the audit the auditor identified certain circumstances that made him doubt the authenticity this document, and a special investigation was carried out on this matter (for example, using procedures related to examination or confirmation).

A11. The auditor may find it useful to prepare and retain in the audit documentation a summary (sometimes referred to as a memo or memorandum of completion) that describes significant matters identified in the audit and how they were resolved, or that includes references to other supporting audit documentation containing this information. Such a summary can facilitate effective and efficient reviews and inspections of audit documentation, especially for large and complex audit engagements. In addition, the preparation of such a summary may assist the auditor in considering significant matters. It may also help the auditor evaluate the situation to determine whether, in the light of the audit procedures performed and the conclusions reached, there is at least one significant objective set out in an ISA that the auditor cannot achieve, making it impossible fulfillment of the primary objectives of the auditor.

Identification of specific articles or issues tested, as well as the performer and reviewer (see paragraph 9)

A12. Fixing such distinctive features serves to solve a number of problems. For example, it enables the audit team to hold itself accountable for work performed and facilitates investigations of discrepancies or nonconformities. The distinguishing features will vary depending on the audit procedure used and the item or matter being tested. For example:

for detailed testing of purchase orders issued by the organization, the auditor may identify documents selected for testing by their dates or by unique purchase order numbers;

for a procedure that requires selection from a given population or verification of all items in excess of a specified amount, the auditor may record the scope of the procedure and designate the appropriate population (for example, all entries in accounting registers in excess of a specified amount);

for a procedure requiring a systematic sampling from a population of documents, the auditor may identify the documents to be sampled by indicating their source, the start of the sampling range, and the sampling interval (for example, a systematic sampling of shipping reports sampled from a shipping log for the period April 1 to September 30, starting from report number 12345 and selecting every 125th report);

for a procedure that requires interviewing specific employees of the audited organization, the auditor may record the dates of the interviews, as well as the names and titles of these employees of the audited organization;

For an observation procedure, the auditor may describe the process or matter being observed, the persons involved, the respective responsibilities of those persons, and where and when the observation was performed.

A13. ISA 220 requires the auditor to verify the audit work performed by reviewing the audit documentation 7), paragraph 17. . The requirement to document who exactly reviewed the audit work performed does not mean that every working paper needs to provide evidence that it was reviewed. This requirement, however, means that you should document what audit work was audited, who reviewed that work, and when it was reviewed.

Documenting Discussions of Significant Matters with Management, Those Charged with Governance, and Others (Ref: Para. 10)

A14. Documentation is not limited to documents prepared by the auditor, but may include other relevant documents such as minutes of meetings prepared by the organization's staff and agreed with the auditor. Other persons with whom the auditor may discuss significant matters may include other employees within the entity, as well as persons external to the entity, such as consultants who provide services under contract to the entity.

Documentation of how nonconformities were resolved (see clause 11)

A15. The requirement to document how the auditor has resolved inconsistencies in information does not imply that the auditor should retain documentation that is incorrect or out of date.

Features of Small Organizations (Ref: Para. 8)

A16. Audit documentation for the audit small organization usually not as extensive as in an audit large organization. In addition, in the event that the engagement partner performs all of the audit work performed during the audit, the documentation will not include matters that should be documented solely to inform or instruct members of the audit team or to provide evidence that other members of the audit team have reviewed the documentation. (for example, there will be nothing to document about the discussions or the organization of control in the group). However, the engagement partner complies with the fundamental requirement in paragraph 8 to prepare audit documentation that an experienced auditor can understand, since audit documentation may be subject to review by external parties for statutory or regulatory purposes.

A17. When preparing audit documentation, the auditor of a small entity may find it appropriate and effective to draw up a single document on all aspects of the audit, including, where necessary, references to supporting materials in the working documentation. Examples of matters that may be documented in a single document in an audit of a small entity include understanding the entity being audited and its internal controls, overall strategy and audit plan, materiality determined in accordance with SA 320 8) "Materiality in Planning and Conducting an Audit". , assessed risks, significant issues noted during the audit, and conclusions drawn.

Derogation from an Applicable Requirement (Ref: Para. 12)

A18. The requirements of the International Standards on Auditing are designed to enable the auditor to achieve the objectives described in the International Standards on Auditing and thereby achieve the auditor's overall objectives. Therefore, unless exceptional circumstances are involved, the International Standards on Auditing call for compliance with all requirements that are applicable in the circumstances of the audit being conducted.

A19. The documentation requirement applies only to those provisions that are applicable in the particular circumstances. This requirement is not applicable only 9), paragraph 22. in cases where:

the entire ISA is not relevant (for example, if the organization does not have an internal audit function, none of the provisions of ISA 610 (Revised 2013) 10) "Using the work of internal auditors", point 2. are not applicable);

the requirement is conditional and the stipulated condition is absent (for example, a requirement to modify the auditor's opinion if sufficient appropriate audit evidence cannot be obtained when such impossibility does not exist).

Matters Arising After the Date of the Auditor's Report (Ref: Para. 13)

A20. Examples of exceptional circumstances include facts that became known to the auditor after the date of the auditor's report, but which existed at that date and which, had they become known at that date, would have caused a change in the financial statements or a modification of the auditor's opinion in the auditor's report 11) point 14. . Relevant changes to the audit documentation are reviewed in accordance with the requirements set out in ISA 220 12), paragraph 16, with the engagement partner accepting responsibility for the changes.

Finalizing the Audit File (Ref: Paras 14–16)

A21. ISQC Standard 1 (or at least as stringent as required by national law) requires audit firms to establish policies and procedures for the timely completion of audit files 13), paragraph 45. . The appropriate deadline for completing the finalization of the audit file is usually no more than 60 days after the date of the auditor's report 14), paragraph A54. .

A22. Completing the finalization of the audit file after the date of the auditor's report is an administrative procedure that does not involve the performance of any new audit procedures or the generation of new conclusions. However, in the process of generating the audit file, changes may be made to the audit documentation if they are of an administrative nature. Examples of such changes:

removal or removal of obsolete documentation;

sorting, ordering and placement of links in the working documentation;

signing of checklists related to the process of generating the audit file;

documenting the audit evidence that the auditor has collected, discussed and agreed with relevant members of the audit team prior to the date of the auditor's report.

A23. ISQC Standard 1 (or no less stringent national legal requirements) requires firms to establish policies and procedures for retaining engagement records 15), paragraph 47. . The retention period for audit engagement documentation is generally at least five years from the date of the auditor's report on the entity's financial statements, or from the date of the auditor's report on the group's financial statements if issued later than 16), paragraph A61. .

A24. An example of circumstances in which the auditor may find it necessary to modify existing audit documentation or add new audit documentation after the finalization of the audit file is completed is the need to clarify existing audit documentation as a result of comments received in the course of surveillance inspections, whether internal or external to audit organization persons.