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ACCA Strategic Professional · Advanced Audit and Assurance (International) · International regulatory frameworks for audit and assurance services

Tamsin Partners audits Eldridge Co and its report states that the audit was conducted in accordance with ISAs. During file review, the quality reviewer finds that the team complied with all requirements of the relevant ISAs but did not read the ISA 200 objectives, believing objectives are optional. The partner argues the audit is still compliant. Which assessment is most accurate under ISA 200?

The assessment is that the team has fallen short. ISA 200 requires the auditor to understand the whole text of an ISA, including its objectives, and to use those objectives to judge whether further procedures are needed. Following requirements mechanically without regard to objectives is not enough.

  1. AThe team has not met its duty, because the auditor must have an understanding of the entire text of an ISA, including objectives, and use them to judge whether further procedures are neededCorrect
  2. BThe team is compliant, because only the requirements section has any force
  3. CThe team is compliant, because objectives apply only to the audit firm's quality system
  4. DThe team is non-compliant only if the audit opinion later proves to be wrong

Explanation

ISA 200 requires the auditor to have an understanding of the entire text of an ISA and to use the objectives to judge whether sufficient appropriate evidence has been obtained and whether more needs to be done. If an objective is not achieved by complying with requirements, the auditor must consider further procedures. Compliance is not judged by later outcome of the opinion.

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