ISA 800 - Special Considerations - Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks

Question 1

ISA 800 (Revised) – Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks

Answer 1

ISA 800 (Revised) – Introduction

1. Scope of this ISA

It is written inthe context of a COMPLETE set of financial statements prepared in accordance with a ‘Special Purpose Framework‘.

ISA 800 (Revised) deals with SPECIAL considerations relevant to an Audit,of a Single Financial Statement or of a specific Element, Account, or Item of a Financial Statement.

2. Effective Date

This ISA is EFFECTIVE for audits of financial statements for periods ending on or after December 15, 2016.

Question 2

ISA 800 – Objective

Answer 2

Theobjectiveof the ‘auditor’ is to ADDRESS appropriatelythe special considerations that are relevantto:

TheAcceptanceof the engagement;

ThePlanning and Performanceof that engagement; AND

Forming an opinion and Reportingon the financial statements.

Question 3

ISA 800 – Definitions

Answer 3

1. Special Purpose Financial Statements

Financial Statements prepared in accordance with a ‘Special Purpose Framework’.

2. Special Purpose Framework

A financial reporting framework designed to meet the Financial Information needs of specific users. The Financial Reporting Framework May be a ‘Fair Presentation Framework‘ or a ‘Compliance Framework‘.

Question 4

ISA 800 – Requirements

Answer 4

1. Considerations When Accepting the Engagement

1.1 Acceptability of the Financial Reporting Framework

ISA 210 requires the ‘auditor’ to determine the acceptability of the financial reporting framework, the auditor shall OBTAIN an understanding of:

(a) The purpose for which the financial statements are prepared;
(b) The intended users; AND
(c) The steps taken by management to determine that the applicable financial reporting framework is acceptable in the circumstances.

Question 5

ISA 800: 2. Considerations When Planning and Performing the Audit

Answer 5

ISA 200 requires the ‘auditor’ to COMPLY with all ISAs relevant to the audit.In planning and performing an audit of special purpose financial statements, the auditor shall DETERMINE whether application of the ISAs requires special consideration.

ISA 315 (Revised) requires the ‘auditor’ to OBTAIN an understanding of the entity’s selection and application of Accounting Policies

Question 6

ISA 800: 3. Forming an Opinion and Reporting Considerations and 3.1:

Answer 6

When forming an opinion and reporting on Special Purpose Financial Statements, the ‘auditor’ shall APPLY the requirements in ISA 700 (Revised).

3.1 Alerting Readers that the Financial Statements are Prepared in Accordance with a Special Purpose Framework

The auditor’s report on Special Purpose Financial Statements shall INCLUDE an ‘Emphasis of Matter Paragraph’ alerting users of the auditor’s report that the financial statements are prepared in accordance with a special purpose framework and that as a result,the financial statements may NOTbe suitable for another purpose.

Question 7

ISA 800: Synopsis

Answer 7

The International Standard on Auditing ISA 800 ‘Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks’ DEALS with special considerations in the application of (ISAs 200-700) to an audit of Financial Statements prepared in accordance with a ‘Special Purpose Framework’.