PSA 402 - Philippine Standard on Auditing 402 AUDIT...

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Philippine Standard on Auditing 402 AUDIT CONSIDERATIONS RELATING TO ENTITIES USING SERVICE ORGANIZATIONS
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Introduction PHILIPPINE STANDARD ON AUDITING 402 AUDIT CONSIDERATIONS RELATING TO ENTITIES USING SERVICE ORGANIZATIONS CONTENTS PSA 402 Paragraphs 1-3 Consideration of the Client Auditor Service Organization Auditor’s Report Material Misstatements of Facts Effective Date Acknowledgment 4-10 11-18 14-18 19 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 402 The PSAs issued by the Auditing Standards and 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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Introduction PSA 402 1. 2. 3. The purpose of this Philippine Standard on Auditing (PSA) is to establish standards and provide guidance to an auditor whose client uses a service organization. This (PSA) also describes the service organization auditor's reports which may be obtained by client auditors. The auditor should consider how a service organization affects the client’s accounting and internal control systems so as to plan the audit and develop an effective audit approach. A client may use a service organization such as one that executes transactions and
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This note was uploaded on 11/30/2011 for the course ECON 310 taught by Professor Johnsmith during the Spring '11 term at Kentucky.

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PSA 402 - Philippine Standard on Auditing 402 AUDIT...

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