SAICA: Updated FAQs on application of the ISAs

23 February 2022
Accounting
South African Accounting Academy

Existing FAQs updated (7 and 10)

FAQ 7 When information to be used as audit evidence involves the work of experts has been updated to include references to the work of experts contained in ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures.
FAQ 10, Testing the completeness assertion from an appropriate source, which provides guidance on the auditor’s evaluation of the relevance of information produced by the entity to be used as audit evidence, has been updated to include links to two new FAQs, namely FAQ 11 and FAQ 12.

New FAQs added (11 and 12)

The new FAQs address recurring regulatory inspections findings relating to the audit of revenue.

FAQ 11 Obtaining audit evidence about the accuracy and completeness of information produced by the entity provides guidance on information to be used as audit evidence that is produced by the entity and how the auditor evaluates whether the information is sufficiently reliable for the auditor’s purpose, specifically focusing on the accuracy and completeness of that information.
FAQ 12 Auditing the completeness of revenue: An illustrative example focusing on the relevance and reliability of the population from which items are selected for testing illustrates the practical application of concepts from FAQ 10 and FAQ 11, and should be read in conjunction with those FAQs.

This updated version of this document was published in December 2021. This document is non-authoritative.

Click here to download the 69-page FAQ Document:

https://saicawebprstorage.blob.core.windows.net/uploads/resources/AssuranceFAQs.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

As an auditor and independent reviewer, you need to comply with International Standards on Auditing and other Assurance Services, and thus you need knowledge of newly revised standards that are approved as well as when they become effective.
Failure to adhere to ISAs may be interpreted as negligence and you could be held liable.
Although specific references to the ISAs have been included in this document, the auditor is still required to have an understanding of the entire text of the ISAs to assess whether or not any particular FAQ is relevant to an engagement, and if so, to enable the auditor to apply all the requirements of the particular ISAs properly.
The concepts of professional scepticism and professional judgement should be applied in all the scenarios described in the FAQs. The different approaches presented are not necessarily the only acceptable approaches. The auditor must obtain sufficient appropriate audit evidence in the circumstances of a particular audit in accordance with the requirements of the ISAs relevant to the audit

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