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CS Professional · Compliance Management, Audit and Due Diligence · Audit Principles and Techniques

The auditor of Himalaya Pharma Ltd finds that the SA requirements, applied as written, do not address an unusual revenue arrangement in a new contract. What does SA 200 expect of the auditor?

The auditor must determine and perform additional procedures where needed to meet the objectives. SA 200 recognises that engagement circumstances vary widely and cannot all be anticipated in the SAs, so the auditor remains responsible for procedures necessary to achieve the objectives.

  1. ADetermine and perform additional audit procedures needed to achieve the objectivesCorrect
  2. BPerform only the procedures expressly listed in the SAs
  3. CExclude the arrangement from the audit scope
  4. DWait for the ICAI to issue a specific standard

Explanation

SA 200 states that because engagement circumstances vary and cannot all be anticipated, the auditor is responsible for determining the procedures necessary to fulfil the requirements and achieve the objectives, including procedures beyond those required by the SAs. Limiting work to listed procedures is therefore wrong.

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