ICAI Implementation Guide on Reporting Standards-Revised SA 700, Revised SA 705 and Revised SA 706
In the year 2016, the Institute of Chartered Accountants of India (ICAI) had issued the revised auditor’s reporting standards i.e.
| (a) Revised SA 700 – Forming an Opinion and Reporting on Financial Statements | It represents the overarching standard for auditor reporting in accordance with the SAs and includes the required elements of the auditor’s report, and specifies the contents of the sections for the opinion, basis for opinion, management responsibilities and auditor responsibilities. |
| (b) Revised SA 705 – Modifications to the Opinion in the Independent Auditor’s Report and | It seals with how the elements of the auditor’s report are affected when a qualified, adverse or disclaimer of opinion is expressed |
| SA 706 (Revised), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report | It addresses the requirements for inclusion of Emphasis of Matter (EOM) and Other Matter (OM) paragraphs in the auditor’s report, and has been updated to: • Explain the relationship of EOM and KAMs. • Remove reporting of material uncertainties related to going concern as a form of EOM reporting |
These standards prescribe new formats of audit reports and have drastically changed the manner of auditor’s reporting. These standards are effective for audits of financial statements for periods beginning on or after April 1, 2018.
Auditing and Assurance Standards Board (AASB) of ICAI have released the said Implementation Guide for the benefit of its CA members.
The Implementation Guide consists of illustrations of Independent Auditor’s Reports with respect to all the three revised auditor’s reporting standards. The various issues in the said reporting standards have been dealt with in an Question-Answer format.
It has been cautioned that the Implementation Guide do not replace or substitute the original Standard(s) and therefore it should be applied on a stand-alone basis. The Guide is meant only to enhance the understanding of the Standards and provide guidance where appropriate.
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