PSA-120 - Auditing Standards and Practices Council...

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Philippine Standard on Auditing 120 FRAMEWORK OF PHILIPPINE STANDARDS ON AUDITING Auditing Standards and Practices Council
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PSA 120 FRAMEWORK OF PHILIPPINE STANDARDS ON AUDITING CONTENTS Paragraphs Introduction 1-2 Financial Reporting Framework 3 Framework for Auditing and Related Services 4-5 Levels of Assurance 6-10 Audit 11-13 Related Services 14-18 Auditor Association with Financial Information 19 Acknowledgment 20-21 Philippine Standards on Auditing (PSAs) are to be applied in the audit of financial statements. PSAs are also to be applied, adapted as necessary, to the audit of other information and to related services. PSAs contain the basic principles and essential procedures (identified in bold type black lettering) together with related guidance in the form of explanatory and other material. The basic principles and essential procedures are to be interpreted in the context of the explanatory and other material that provide guidance for their application. To understand and apply the basic principles and essential procedures together with the related guidance, it is necessary to consider the whole text of the PSA including explanatory and other material contained in the PSA not just that text which is black lettered. In exceptional circumstances, an auditor may judge it necessary to depart from a PSA in order to more effectively achieve the objective of an audit. When such a situation arises, the auditor should be prepared to justify the departure. PSAs need only be applied to material matters.
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PSA 120 The PSAs issued by the Auditing Standards Practices Council (Council) are based on International Standards on Auditing (ISAs) issued by the International Auditing Practices Committee of the International Federation of Accountants. The ISAs on which the PSAs are based are generally applicable to the public sector, including government business enterprises. However, the applicability of the equivalent PSAs on Philippine public sector entities has not been addressed by the Council. It is the understanding of the Council that this matter will be addressed by the Commission on Audit itself in due course. Accordingly, the Public Sector Perspective set out at the end of an ISA has not been adopted into the PSAs.
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PSA 120 Framework of Philippine Standards on Auditing Introduction 1. The Auditing Standards and Practices Council has been authorized to issue Philippine Standards on Auditing (PSAs). The purpose of this document is to describe the framework within which PSAs are issued in relation to the services which may be performed by auditors. 2. For ease of reference, except where indicated, the term “auditor” is used throughout the PSAs when describing both auditing and related services which may be performed. Such reference is not intended to imply that a person performing related services need be the auditor of the entity's financial statements. Financial Reporting Framework
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This note was uploaded on 02/26/2011 for the course ACCOUNTING 310 taught by Professor Cruz during the Spring '11 term at Xavier - Ateneo de Cagayan.

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PSA-120 - Auditing Standards and Practices Council...

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