Auditing and ISA (International Standards on Auditing)

International Standards on Auditing (ISAs) are professional standards that deal with the independent auditor’s responsibilities when conducting an audit of financial statements.

ISAs contain objectives and requirements together with application and other explanatory material.

The auditor is required to have an understanding of the entire text of an ISA, including its application and other explanatory material, to understand its objectives and to apply its requirements properly.

Each ISA is structured in separate sections:

1. Introduction: Introductory material may include the purpose, scope, and subject matter of the ISA, in addition to the responsibilities of the auditor ahd others in the context in which the ISA is set.

2. Objective: Each ISA contains a clear statement of the objective of the auditor in the audit area addressed by that ISA.

3. Definitions: For greater understanding of the ISAs, applicable terms are defined in each ISA.

4. Requirements: Each objective is supported by clearly stated requirements. Requirements are always expressed by the phrase “the auditor shall.”

5. Application and other explanatory material: The application and other explanatory material explains more precisely what a requirement means or is intended to cover, or includes examples of procedures that may be appropriate under given circumstances.