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CMA Intermediate · Corporate Accounting and Auditing · Brief Introduction to Auditing Standards

A student states four points about the deletion noted in the modifications of SA 200 compared with ISA 200 concerning public sector entities. Which statement is consistent with the official text?

The specific reference to public sector entities was deleted because the Standards apply equally to all entities irrespective of their form, nature and size. Any additional responsibilities of the auditor are dealt with by the laws or regulations governing the public sector entity, not by the SAs.

  1. AThe SAs apply only to private sector entities, so references to public sector entities were removed.
  2. BThe SAs apply equally to all entities irrespective of form, nature and size, so a specific reference to their applicability to public sector entities was deleted.Correct
  3. CThe references were deleted because public sector entities are exempt from SA 200 under the Preface.
  4. DThe references were deleted because additional public sector responsibilities are now dealt with by the SAs themselves.

Explanation

The text explains that the additional responsibilities for public sector entities are dealt with by the laws or regulations under which the entity operates, not by the SAs. Since the Preface says the Standards apply equally to all entities irrespective of form, nature and size, the specific reference to public sector entities was deleted. The spirit of the paragraphs was retained. The option claiming the SAs now deal with those responsibilities contradicts the text.

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