PSA-402-Revised-and-Redafted

PSA-402-Revised-and-Redafted - Auditing and Assurance...

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Philippine Standard on Auditing 402 (Revised and Redrafted) AUDIT CONSIDERATIONS RELATING TO AN ENTITY USING A SERVICE ORGANIZATION Auditing and Assurance Standards Council
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PSA 402 (Revised and Redrafted) 1 PHILIPPINE STANDARD ON AUDITING 402 (REVISED AND REDRAFTED) AUDIT CONSIDERATIONS RELATING TO AN ENTITY USING A SERVICE ORGANIZATION (Effective for audits of financial statements for periods beginning on or after December 15, 2009) CONTENTS Paragraph Introduction Scope of this PSA. ................................................................................................ 1-5 Effective Date. ...................................................................................................... 6 Objectives ............................................................................................................ 7 Definitions ........................................................................................................... 8 Requirements Obtaining an Understanding of the Services Provided by a Service Organization, Including Internal Control. ...................................................... 9-14 Responding to the Assessed Risks of Material Misstatement. ............................ 15-17 Type 1 and Type 2 Reports that Exclude the Services of a Subservice Organization…………………………………………………… 18 Fraud, Non-Compliance with Laws and Regulations and Uncorrected Misstatements in Relation to Activities at the Service Organization. .......... 19 Reporting by the User Auditor. ........................................................................... 20-22 Application and Other Explanatory Material Obtaining an Understanding of the Services Provided by a Service Organization, Including Internal Control. .................................................... A1-A23 Responding to the Assessed Risks of Material Misstatement. .......................... A24-A39 Type 1 and Type 2 Reports that Exclude the Services of a Subservice Organization. ............................................................................. A40 Fraud, Non-Compliance with Laws and Regulations and Uncorrected Misstatements in Relation to Activities at the Service Organization. ........ A41 Reporting by the User Auditor. ......................................................................... A42-A44 Acknowledgment
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PSA 402 (Revised and Redrafted) 2 Philippine Standard on Auditing (PSA) 402 (Revised and Redrafted), “Audit Considerations Relating to an Entity Using a Service Organization” should be read in conjunction with PSA 200 (Revised and Redrafted), “Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Philippine Standards on Auditing.”
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PSA 402 (Revised and Redrafted) 3 Introduction Scope of this PSA 1. This Philippine Standard on Auditing (PSA) deals with the user auditor’s responsibility to obtain sufficient appropriate audit evidence when a user entity uses the services of one or more service organizations. Specifically, it expands on how the user auditor applies PSA 315 (Redrafted) 1 and PSA 330 (Redrafted) 2 in obtaining an understanding of the user entity, including internal control relevant to the audit, sufficient to identify and assess the risks of material misstatement and in designing and performing further audit procedures responsive to those risks. 2. Many entities outsource aspects of their business to organizations that provide services ranging from performing a specific task under the direction of an entity to replacing an entity’s entire business units or functions, such as the tax compliance function. Many of the services provided by such organizations are integral to the entity’s business operations; however, not all those services are relevant to the audit.
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This note was uploaded on 12/14/2011 for the course ACCO 101 taught by Professor Various during the Spring '11 term at Binghamton University.

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PSA-402-Revised-and-Redafted - Auditing and Assurance...

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