International Standards of Auditing (ISA)

Introduction to International Standards on Auditing

International Standards on Auditing (ISA) refer to professional standards dealing with the responsibilities of the independent auditor while conducting the financial audit of financial info. These standards are issued by International Federation of Accountants (IFAC) through the International Auditing and Assurance Standards Board (IAASB). The ISAs include requirements and objectives along with application and other explanatory material. The auditor is obligatory to have knowledge about the whole text of an ISA, counting its application and other explanatory material, to be aware of the objectives and to apply the requirements aptly.

List of the Standards

The key standards issued by the ISA include:

• Respective responsibilities
• Audit planning
• Internal control
• Audit evidence
• Using work of other experts
• Audit conclusions and audit report
• Specialized areas

Structure of ISAs

Every ISA is structured in individual sections as:

• Introduction

Introductory material can include the purpose, scope, and subject matter of the ISA, as well as the responsibilities of the auditor and others in context in which the ISA is established.

• Objective

Every ISA consists of as clear statement about the objective of the auditor in the audit area addressed by that ISA.

• Definitions

For higher understanding of the ISAs, pertinent terms are delineated in each ISA.

• Requirements

Every objective is shored up by clearly stated requirements. Requirements are always expressed by the phrase “the auditor shall.”

• Application and other explanatory material

The application and other explanatory material explains more exactly what is meant by a requirement or is intended to cover, or includes examples of procedures that can be appropriate under certain circumstances.

Objectives of the ISA

The ISA objectives are two-fold:

• Analyzing the comparability of national accounting as well as auditing standards with international standards, determine the degree with which applicable auditing and accounting standards are complied, and analyze strengths and weaknesses of the institutional framework in sustaining high-quality financial reporting.
• Assist the country in developing and implementing a country action plan for improvement of institutional capacity with a view of strengthening the corporate financial reporting system of the country.