AUDITING AND ASSURANCE STANDARDS

MADE BY: VANITA RATHOD

Auditing & Assurance Standard 16 (AAS-16

Introduction: 1. The purpose of this Auditing and Assurance Standard (AAS) is to establish standards on the auditor's responsibilities in the audit of financial statements regarding the appropriateness of the going concern assumption as a basis for the preparation of the financial statements. Appropriateness of the Going Concern Assumption: The auditor should consider the risk that the going concern assumption may no longer be appropriate. Audit Evidence: When a question arises regarding the appropriateness of the going concern assumption, the auditor should gather sufficient appropriate audit evidence to attempt to resolve, to the auditor's satisfaction, the question regarding the entity's ability to continue in operation for the foreseeable future.

Audit Conclusions and Reporting:After the procedures considered necessary have been carried out, all the information required has been obtained, and the effect of any plans of management and other mitigating factors have been considered, the auditor would decide whether the question raised regarding the going concern assumption has been satisfactorily resolved. Going Concern Assumption Considered Appropriate:If, in the auditor's judgement, sufficient appropriate audit evidence has been obtained to support the going concern assumption, the auditor would not qualify his report on this account. Effective Date 19. This Auditing and Assurance Standard becomes operative for all audits relating to accounting periods beginning on or after April 1, 1999.

Auditing & Assurance Standard 17 (AAS-17)

Introduction 1. The purpose of this Auditing and Assurance Standard (AAS) is to establish standards on the quality control: (a) policies and procedures of an audit firm regarding audit work generally; and (b) procedures regarding the work delegated to assistants on an individual audit. Audit Firm:The audit firm should implement quality control policies and procedures designed to ensure that all audits are conducted in accordance with Auditing 55and Assurance Standards (AASs). Individual Audits 8. The auditor should implement those quality control procedures which are, in the context of the policies and procedures of the firm, appropriate to the individual audit.

Direction 11. Assistants to whom work is delegated need appropriate direction. Direction involves informing assistants of their responsibilities and the objectives of the procedures they are to perform. It also involves informing them of matters, such as the nature of the entity's business and possible accounting or auditing problems that may affect the nature, timing and extent of audit procedures with which they are involved. Effective Date 18. This Auditing and Assurance Standard becomes operative for all audits relating to accounting periods beginning on or after April 1, 1999.

Auditing & Assurance Standard 18 (AAS-18)

Introduction The purpose of this Auditing and Assurance Standard (AAS) is to establish standards on the audit of accounting estimates contained in financial statements. This AAS is not intended to be applicable to the examination of prospective financial information[1]. Audit Procedures 8. The auditor should obtain sufficient appropriate audit evidence as to whether an accounting estimate is reasonable in the circumstances and, when required, is appropriately disclosed in the financial statements. The evidence available to support an accounting estimate will often be more difficult to obtain and less conclusive than evidence available to support other items in the financial statements.

Evaluation of Data and Consideration of Assumptions 12. The auditor would evaluate whether the data on which the estimate is based is accurate, complete and relevant. When accounting data is used, it will need to be consistent with the data processed through the accounting system. For example, in substantiating a warranty provision, the auditor would obtain audit evidence that the data relating to products still within the warranty period, at period end, agree with the sales information within the accounting system. Effective Date 27. This Auditing and Assurance Standard becomes operative for all audits commencing