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

Under SA 200, where an SA contains a separate section headed "Definitions", what is the stated purpose of the meanings given there?

The Definitions section of an SA exists to help the SAs be applied and interpreted consistently. It is not meant to override definitions made for other purposes in law or regulation, and unless indicated otherwise the terms mean the same throughout all the SAs.

  1. ATo override definitions established for other purposes in law or regulation
  2. BTo assist consistent application and interpretation of the SAs, without overriding definitions set for other purposesCorrect
  3. CTo apply only to the SA in which they appear and to carry different meanings in other SAs
  4. DTo replace the Glossary of Terms issued by the Auditing and Assurance Standards Board

Explanation

SA 200 says definitions in an SA assist consistent application and interpretation of the SAs. They are not intended to override definitions established for other purposes, whether in law, regulation or otherwise. Unless otherwise indicated, the terms carry the same meaning throughout the SAs, so the option claiming they override law is wrong.

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