Advanced Auditing, Assurance and Professional Ethics · General Auditing Principles and Auditors Responsibilities

Conduct of Audit in Accordance with SAs: Compliance and Objectives

Updated 5 October 2026 · Fact-checked

Conducting an audit in accordance with SAs means you comply with every SA relevant to the audit and every requirement in it, unless the requirement is not relevant. You use each SA's objective to judge if you did enough, add procedures if needed, and document any exceptional departure with reasons.

Understand Conduct of Audit in Accordance with SAs

Standards on Auditing are the benchmark for how an audit must be done. SA 200 says the auditor must conduct the audit in accordance with SAs. An auditor cannot say the audit was done under SAs if some relevant requirements were skipped.

The auditor must have an understanding of the entire text of an SA, including its application and other explanatory material, to understand its objectives and apply its requirements properly. The requirements are the part with the word "shall". The application material explains how to apply them and does not add new requirements.

An SA is relevant when it is in effect and the circumstances it addresses exist. For example, SA 510 on opening balances applies when the audit is an initial audit engagement. An initial audit engagement is one in which the financial statements for the prior period were not audited, or were audited by a predecessor auditor. This covers a new auditor taking over from a predecessor, and a first audit where the prior period financial statements were unaudited. It is not relevant where the same auditor audited the prior period and continues the engagement. SA 550 on related parties applies to every audit. SA 600 applies only to group audits, that is, audits of group financial statements that involve components. A requirement is not relevant only if it is conditional and the condition does not exist. For example, a requirement that depends on a circumstance that is absent.

Each SA states an objective. The auditor uses the objective to decide whether further audit procedures are needed beyond the stated requirements. If the requirements do not achieve the objective in the circumstances, the auditor performs more procedures. If the objective cannot be achieved, the auditor cannot meet the SA, and this affects the report. The auditor may also need to withdraw from the engagement, where withdrawal is possible under applicable law or regulation.

In exceptional circumstances, the auditor may judge it necessary to depart from a relevant requirement. Then the auditor must perform alternative audit procedures that achieve the aim of that requirement. Such a need arises only when the prescribed procedure would be ineffective in the specific circumstances. Not being able to do a procedure because it is difficult or inconvenient is not a valid reason. The auditor must also document the circumstances and the reasons for the departure.

Key rules to remember

Compliance rule: Relevant SA + relevant requirement → must comply; Do not claim an audit under SAs if any relevant requirement was not met, other than a justified departure with alternative procedures.
Relevance test for an SA: SA in effect AND circumstances addressed by the SA exist; If the circumstances do not exist, the SA is not relevant to that audit.
Relevance of a requirement: A requirement is not relevant if it is conditional and the condition does not exist; Example: a requirement that applies only when a specific circumstance arises.
Use of objectives: Objective achieved? If not, perform further procedures; If the objective still cannot be achieved, the auditor evaluates the effect on the opinion or report, and may need to withdraw where permitted.
Departure rule: Exceptional circumstances → alternative procedures + documentation of reasons; The alternative procedures must achieve the aim of the requirement departed from.
Understanding the SA: Requirements + application and other explanatory material = full text; Read the whole text. Application material guides the requirements but does not create new ones.

How to solve Conduct of Audit in Accordance with SAs questions

Use this order for any question on compliance with SAs. It keeps your answer in provision, facts and conclusion form.

1Identify the SA involved and state the rule from SA 200: the auditor must comply with all SAs relevant to the audit.
2Check relevance: is the SA in effect, and do the circumstances it addresses exist in the case?
3Check the requirement: is it unconditional, or conditional on a circumstance that is present or absent?
4Apply the objective: did the procedures performed achieve the SA's stated objective in these facts? If not, say more procedures are needed.
5If the case shows a departure, test whether the circumstances are exceptional, and whether alternative procedures were performed that achieve the aim of the requirement.
6Check documentation: reasons for the departure and the alternative procedures must be recorded.
7Conclude clearly: complied, not complied, or justified departure, and state the consequence for the report or the engagement if the objective is unmet.

Quickest way: Four-line SA compliance check

When to use it: Use it for short MCQs and for written answers when time is tight.

Relevant? SA in effect and circumstances exist.
Requirement met? Every relevant requirement, unless conditional and not triggered.
Objective met? If not, add procedures.
Departure? Only if exceptional, with alternative procedures and documented reasons. Convenience or cost is never a reason.

Common mistakes in Conduct of Audit in Accordance with SAs

Saying the auditor may skip an SA that seems unimportant.
Students treat SAs as guidance rather than binding requirements.
Fix: State that all relevant SAs and all relevant requirements must be complied with. Only a requirement that is not relevant may be left out.
Confusing an SA that is not relevant with a requirement that is not relevant.
Both use the word relevance, so the levels get mixed up.
Fix: First decide if the whole SA applies, for example SA 600 when the entity is standalone with no components. Then decide, within a relevant SA, if a conditional requirement is triggered.
Treating application material as extra requirements, or ignoring it.
Students read only the "shall" paragraphs.
Fix: Say that the full text must be understood, but requirements are in the requirement paragraphs. Application material explains how to apply them.
Justifying a departure on grounds of cost, time or client resistance.
Students think practical difficulty is exceptional.
Fix: Departure is only for exceptional circumstances where the prescribed procedure would be ineffective. Then perform alternative procedures achieving the aim and document the reasons.
Finishing the listed procedures and stopping, even when the objective is not met.
Students follow requirements like a checklist.
Fix: Always test against the objective. If the objective is not achieved, perform further procedures. If it still cannot be achieved, consider the effect on the report.
Forgetting documentation of the departure.
Students focus only on the alternative procedure.
Fix: Always end with: document the circumstances, the reasons and the alternative procedures performed.

Worked examples

Example 1

CA Meera is auditing a standalone company that has no subsidiaries, branches or other components and prepares no group financial statements. Her junior says she must still comply with SA 600 because all SAs apply to every audit. Is the junior correct?

Show the solution

Rule: SA 200 requires compliance with SAs relevant to the audit. An SA is relevant when it is in effect and the circumstances it addresses exist.
Facts: SA 600 deals with audits of group financial statements. The entity is standalone, with no components and no group financial statements, so the circumstances SA 600 addresses do not exist.
Application: SA 600 is not relevant to this audit. Other relevant SAs, such as those on risk assessment, evidence, and reporting, must still be complied with.
Conclusion: The junior is wrong. Meera need not apply SA 600, but she must comply with every relevant SA and each of its relevant requirements.

Answer: SA 600 is not relevant because this is not a group audit. Meera must comply with all other SAs relevant to the audit.

Example 2

In an audit, an SA requires a specific procedure. Because of the particular circumstances of the engagement, the auditor concludes that this prescribed procedure would be ineffective in achieving its purpose. The auditor wants to leave out the procedure and record nothing in the file. Advise.

Show the solution

Rule: The auditor must comply with each relevant requirement. In exceptional circumstances, the auditor may judge it necessary to depart from a relevant requirement, but must then perform alternative procedures that achieve the aim of the requirement.
Facts: The prescribed procedure would be ineffective in the specific circumstances. This is the valid ground for a departure. Saving time or effort would not be.
Application: The auditor may depart from the requirement, but cannot simply omit it. The auditor must design and perform alternative procedures that achieve the aim of the requirement.
Documentation: The auditor must record the circumstances, the reasons for the departure and the alternative procedures performed. Recording nothing in the file is not acceptable.
Objective check: The auditor must assess whether the objective of the SA is achieved. If not, further procedures are needed, and if it still cannot be achieved, the effect on the report is considered.

Answer: The auditor may depart only because the prescribed procedure would be ineffective in the circumstances. Alternative procedures achieving the aim must be performed and the circumstances and reasons documented, with the SA's objective rechecked.

Exam tips

Begin written answers with the SA 200 rule in one line, then apply facts. This follows provision, facts, conclusion.
In MCQs, reject options that say an auditor may ignore an SA because of cost, client pressure or convenience.
Look for the word "relevant" in the case. Decide whether the SA is relevant or the requirement is conditional.
Always mention objectives. Examiners reward the point that objectives guide whether more procedures are needed.
For a departure case, write three items: exceptional circumstance, alternative procedures, documentation.

Practice questions from General Auditing Principles and Auditors Responsibilities

Conduct of Audit in Accordance with SAs in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

CMA FinalConducting an Audit in Accordance with Standards on Cost Auditing

Conduct of Audit in Accordance with SAs: frequently asked questions

What does conducting an audit in accordance with SAs mean?

It means you comply with all SAs relevant to the audit and with each relevant requirement in them. You also understand the full text of each SA, including the objectives. Only then can the audit be described as conducted in accordance with SAs.

When is an SA not relevant to an audit?

An SA is not relevant when it is not in effect or when the circumstances it addresses do not exist in the engagement. For example, SA 600 does not apply to a standalone entity with no components and no group financial statements. SA 510 on opening balances is not relevant where the same auditor continues the engagement, because it is not an initial audit engagement.

How do I use the objective stated in an SA?

Compare what you have done with the objective. If the requirements did not achieve it in the circumstances, perform further procedures. If the objective still cannot be achieved, consider the effect on your report.

Can an auditor ever depart from a requirement of an SA?

Yes, but only in exceptional circumstances where the prescribed procedure would be ineffective. The auditor must perform alternative procedures that achieve the aim of the requirement and document the reasons. Convenience or cost is not a valid reason.