Quyết định 04/2014/QD-KTNN

Decision No. 04/2014/QD-KTNN dated July 31, 2014, issuing the state auditing standard No.200 - fundamental principles of financial auditing

Nội dung toàn văn Decision No. 04/2014/QD-KTNN issuing the state auditing standard No.200


THE STATE AUDIT OFFICE OF VIETNAM
--------

SOCIALIST REPUBLIC OF VIETNAM
Independence - Freedom - Happiness
---------------

No: 04/2014/QĐ-KTNN

Hanoi, July 31, 2014

 

DECISION

ISSUING THE STATE AUDITING STANDARD NO.200 - FUNDAMENTAL PRINCIPLES OF FINANCIAL AUDITING

THE STATE AUDITOR GENERAL

Pursuant to the Law on The state audit office;

Pursuant to Resolution No. 916/2005/NQ-UBTVQH11dated September 15, 2005 of the Standing committee of the National Assembly of the Socialist Republic of Vietnam on organizational structure of The state audit office;

Pursuant to Resolution No. 917/2005/NQ-UBTVQH 11dated September 15, 2015 of the Standing committee of the National Assembly of the Socialist Republic of Vietnam on process of building and issuing the state auditing standard ;

At the request of the Director of Audit Policy and Audit Quality Control Department and the Director of Legal Affair Department,

HEREBY DECIDES:

Article 1. The state auditing standard no.200 -fundamental principles of financial audit is enclosed with this Decision

Article 2. This Decision takes effect after 45 days from the date of signing.

Article 3. The heads of affiliates of the state audit office, related organizations and individuals shall be responsible for the implementation of this Decision. /.

 

 

 

THE STATE AUDITOR GENERAL




Nguyen Huu Van

 

THE STATE AUDITING STANDARD NO.200 (SAS 200) FUNDAMENTAL PRINCIPLES OF FINANCIAL AUDITING

(enclosed herewith the state auditor General’s Decision No. 04 /2014/QĐ-KTNN dated July 31, 2014)

INTRODUCTION

Basis of establishment

1. This standard is established and developed on the basis of the Law on state audit, the state auditing Standard No.100 - fundamental principles of the state audit office and ISSAI 200 by INTOSAI - Fundamental Principles the financial auditing. The fundamental principles of this standard are developed into practical guidelines on financial auditing (The state auditing Standard level 4) and are used in the audit process.

Purpose and Scope of application

2. This standard provides fundamental principles for an audit of financial statements prepared in accordance with a financial reporting framework. The principles also apply to audit single financial statements and specific elements, accounts or items of a financial statement, or financial statements prepared in accordance with special-purpose financial frameworks, or summary financial statements.

3. The fundamental principles apply to all public-sector audits of financial statements, whether for the whole of government, parts of government or single entities. all financial audits (audit of financial statements prepared in accordance with a financial reporting framework, single financial statements and specific elements, accounts or items of a financial statement, or financial statements prepared in accordance with special-purpose financial frameworks, or summary financial statements).

4. This standard represents the core of the financial auditing standards at level 3 of auditing standard system of the state audit office. The principles in this standard can be used as a basis to prepare and implement financial auditing standards at level 4 uniformly.

5. If a financial audit conducted together with a compliance auditing or/and an operational auditing, the state auditors should comply with financial auditing standard, compliance auditing standard and performance auditing standard. If there are different standards between different types of audit, the state auditors shall give priority to the standard which is suitable to applicable auditing types and the main contents of the audit.

Implementation provision

6. This standard refers to fundamental principle applied to a financial audit of the state audit office.

7. The financial auditing mainly aims to determine whether the financial statements or financial information of the audited units match the current framework for preparation and presentation of financial statements or not, thereby assessing and recognizing the correctness and truthfulness of such financial statements or financial information. In addition, there are other purposes associated with the contents of the audit such as:

(i) Other accounts or financial statements that are not prepared and presented in accordance with the framework for preparation and presentation of financial statements for general purposes;

(ii) Budget, budget item, budgetary allocations and decisions about the allocation and use of resources;

(iii) Policies, programs and activities carried out under regulations or at the request of the sponsors;

(iv) Fulfillment of responsibility under the law (eg. Fulfillment of the State management responsibility of the Ministries and agencies);

(V) Revenues, expenditures, assets or liabilities

Use principle of terms in the standard

8. The terms used in this standard are defined as in the auditing standards issued by the state audit office.

STANDARD’S CONTENTS

9. This standard includes: general provisions for financial auditing; Elements of financial auditing; fundamental principles of financial auditing.

General provisions for financial auditing

The objective of financial auditing

10. The purpose of an audit of financial statements is to enhance the degree of confidence of intended users in the financial statements and financial information. This is achieved through the expression of an opinion by the state auditor as to whether the financial statements or financial information are prepared fairly, in all material respects, in accordance with an applicable financial reporting framework.

11. In conducting an audit of financial statements, the overall objectives of the auditor are:

(i) To obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, thereby enabling the auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework;

(ii) To report on the financial statements, and communicate the result of the audit, in accordance with the auditor’s findings.

Preconditions for an audit of financial statements in accordance with the financial auditing standard

12. The auditor should assess whether the preconditions for an audit of financial statements have been met.

13.  Preconditions for an audit of financial statements in accordance with the state audit office standard must satisfy the following conditions:

(i)The financial reporting framework used for preparation of the financial statements must comply with current regulations.

(ii)The heads of the audited units acknowledges and understands their responsibility:

. For preparation of the financial statements in accordance with the applicable financial reporting framework, including, where relevant, their fair presentation;

. For such internal control that management deems necessary for the preparation of financial statements that are free from material misstatement, whether due to fraud or error;

. To provide the auditor with unrestricted access to all information that is relevant to the preparation of the financial statements.

14. The unit taking charge of the audit, the audit team must consider whether the expected audited unit is subject to auditing as prescribed by the Law on The state audit office and related regulations or not; whether the expected audited financial statements are presented according the financial reporting or not.

15. Financial reporting frameworks may be used for general use or specific use. Frameworks may also be referred to as fair presentation frameworks or compliance frameworks.

(i)A framework designed to meet the information needs of a wide range of users is referred to as a general-purpose framework.

(ii) Special-purpose frameworks are designed to meet the specific needs of a

(iii) A compliance framework is used to refer to a financial reporting framework that requires compliance with the requirements of the framework and does not acknowledge the possibility of such deviations to achieve a fair presentation.

(iv) A fair presentation framework requires compliance with the framework but allows, explicitly or implicitly, that it may be necessary to depart from a requirement or to provide additional information in order to achieve fair presentation of the financial statements.

16. A complete set of financial statements for an entity consists of reports prepared and presented in accordance with current regulations on financial statement. For example, a complete set of annual financial statements for an enterprise consists of : the Balance sheet, income statement, cash flow statement and note to financial statement prepared under the prescribed form; a complete set of a public service provider consists of : Account balance statement, summary of funds and settlement of used funds, detailed statement of operational cost, detailed report on project cost, comparison of budget estimates in State Treasuries, comparison of advance and payment of advance of budget in State Treasuries, statement of revenue-expenditure of its operation, production and business, statement of changes in net assets/equity; statement of unused funds transferred from previous year, note to financial statement.

17. Frameworks prescribed by current law will often be deemed acceptable by the auditor. However, even if deemed unacceptable, such a framework may be allowable if:

The head of audited entity agrees to provide the necessary additional disclosures in the financial statements to avoid their being misleading;

(ii) The auditor’s report on the financial statements includes an “Emphasis of Matter” paragraph drawing users’ attention to such additional disclosures.

If the above conditions are not met, the auditor should evaluate the effect of the misleading nature of the financial statements on the auditor’s report and opinion, and consider the need to inform the related competent agencies about the matter.

18. If financial auditing has financial reporting framework, the auditor conducts the audit under the state auditing standards for financial auditing.

 If financial auditing does not have financial reporting framework (for example, a number of programs, projects and programs implemented at the request of sponsors, ...), the auditor may use the standards, guideline developed based on SAS 200 as practice guideline, in accordance with certain requirements of each audit.

19. When financial auditing is mandatory, but it does not meet preconditions under financial auditing standards, the financial auditing standards are still the best practice guideline and auditing should be adjusted to suit the specific conditions.

20. When the content of the audit is compliance auditing, the auditor must comply with the provisions of SAS 400 and related standards on compliance audit. When the content of the audit is performance auditing, the auditor should comply with the provisions of SAS 300 and related standards on performance auditing.

Audits of financial statements prepared in accordance with special-purpose frameworks

21. The principles of this Standard are applicable to audits of financial statements prepared in accordance with both general-purpose and special-purpose frameworks.

22. Special-purpose frameworks relevant to the public sector may include:

(i) The statement of revenue and expenditure on a basis of accounting for cash flow information that an entity may be required to prepare for a governing body;

(ii) The financial statement established at the request of agencies, organizations or sponsors;

(iii) The financial statement established at the request a governing body, the legislature or other parties that perform an oversight function; or

(iv) The financial statement under the regulations of a contract or an agreement.

Audits of single financial statements and specific elements, accounts or items of a financial statement

23. The standard is also applicable to audits of a complete set of financial statement or single financial statements or specific elements, accounts or items or notes of a financial statement

Elements of financial auditing

24. Fundamental elements of public-sector audit are defined in SAS 100- fundamental principles of the state audit office. This standard covers additional aspects of the elements relevant to an audit of financial statements.

The three parties in financial auditing

25. The three parties in financial auditing are: the state audit office, responsible party and intended users of financial statement. These contents are defined in SAS 100 - fundamental principles of the state audit office

Subject matter information

26.  Subject matter information is the financial position, financial performance, cash flows and notes presented in the financial statements

27. The auditor gathers sufficient appropriate audit evidence to express an opinion in the auditor’s report.

Suitable criteria

28. Criteria are the benchmarks used to evaluate or measure the subject matter, including: Law, standard, regulations, frameworks of financial reporting, issued by competent agencies.

29. The auditor has responsibility for selecting the appropriate criteria for each of his/her financial audit. To determine the suitability of the audit criteria of an financial audit, the auditor should consider the criteria that are related to the subject matter, whether the intended users of audit report understand and comply with these criteria or not. The auditor should also consider other elements of the criteria applied to each audit such as: The completeness, reliability, objectiveness and being widely accepted and being able to be compared in the similar financial audit.

30. Criteria used in financial auditing must be informed auditing units and users of audit reports to help them understand how to evaluate, measure the subject matter.

Assurance engagement

31. There are two assurance engagements in financial auditing: Reasonable assurance engagement and limited assurance engagement

(i) Reasonable assurance is high, but not absolute. Reasonable assurance audits are designed to result in a conclusion expressed in a positive form, such as “in opinion of auditor, in all material respects financial information, financial statement of audited unit prepared and presented reasonably (or truly and fairly in accordance with current framework

(ii) Limited assurance engagements provide a lower level of assurance than reasonable assurance engagements, and are designed to result in a conclusion expressed in a negative form, such as “nothing has come to our attention that would cause us to believe that the financial statements were not presented fairly in all material respects”. Auditors performing such engagements may need to apply guidance from outside the SAS on financial auditing such as referring to fundamental auditing principles in SAS 100- fundamental auditing principles in the state audit office.

Fundamental principles of financial auditing

General principles

Prerequisites for conducting financial audits

Ethics and independence

32. The auditor should comply with the relevant ethical requirements and ensure independence. When carrying out audits of financial statements, the auditor must understand and comply with principles of ethics defined in SAS 30- Principles of ethics

Quality control

33. The auditor should implement quality control procedures at the engagement level that provide reasonable assurance that the audit complies with professional standards and relevant regulations, and that the auditor’s report is appropriate in the circumstances.

34. Auditor must understand and adhere to quality control regulations and procedures as stipulated in SAS 40 - quality control of audit.

35. The requirements and specific guidance on quality control of financial auditing are prescribed in SAS 1220.

Competences and skills

36. The auditor should ensure that the entire audit team, and any external experts, collectively have the competence and capabilities to:

(i) Carry out the audit in accordance with the relevant standards and the applicable legal and regulatory requirements;

(ii) Enable the auditor to issue a report that is appropriate in the circumstances (objectives and subject matter of the audit; the law on financial information audited; ...).

37. The competence and capabilities of the auditor when conducting an audit:

(i) Understanding, through appropriate training, and practical experience of audit engagements of a similar nature and complexity;

(ii) Understanding of professional standards and the applicable legal and regulatory requirements;

(iii)Technical expertise, including the relevant IT skills and knowledge of specialized areas of accounting or auditing;

(iv) Knowledge of relevant industries in which the audited organization operates;

(v) Ability to apply professional judgment;

(vi) Understanding of the state audit office’s quality control policies and procedures;

(vii) Ability to discharge the terms of the audit mandate in the relevant environment, including an understanding of the applicable reporting arrangements, and to report to the legislature or other governing body or in the public interest;

(viii) Skills in the field of performance auditing or compliance auditing.

38. The requirements and specific guidance on competence and capabilities are defined in SAS 1200.

Audit risk

39. The auditor should reduce audit risk to an acceptably low level in the circumstances of the audit so as to obtain reasonable assurance as the basis for an opinion expressed in a positive form

40. The audit risk in an audit of financial statements is the risk that the auditor shall express an inappropriate conclusion if the subject matter information is materially misstated.

41. Audit risk depends on material misstatement and detection risk. Audit risk is a result of the risks of material misstatement and detection risk: in which:

(i) The risk of material misstatement means financial statement may have material misstatement due to fraud or error. Risks of material misstatement consist of inherent risk and control risk.

. Inherent risk – the susceptibility of the subject matter information to material misstatement, assuming that there are no related controls;

. Control risk – the risk that a material misstatement could occur and will not be prevented, or detected and corrected, at the appropriate time by related controls. Some control risk will always exist because of the limitations inherent in the design and operation of internal controls.

(ii) Detection risk – the risk that the auditor will not detect a material misstatement.

42. The assessment of risks is based on audit procedures to obtain information necessary for that purpose, as well as evidence obtained throughout the audit.

 The risk assessment is a matter of professional judgment and is not capable of precise measurement. The degree to which the auditor considers each element of risk will depend on the circumstances of the audit.

43. The requirements and specific guidance on determination and assessment of risk are prescribed in SAS 1315.

Professional judgment and professional skepticism

44. When planning, performing, concluding and reporting an audit of financial statements, the auditor should exercise professional judgment and keep professional skepticism.

45. The terms “professional skepticism” and “professional judgment” are relevant when formulating requirements regarding the auditor's decisions about the appropriate response to matters concerning the audit.

46. The concept of professional judgment is applied by the auditor at all stages of the audit process. It covers the application of relevant skill and experience in accordance with accounting, auditing and ethical standards, when making informed decisions about the courses of action that are appropriate in the circumstances of the audit engagement.

47. Professional judgment is necessary in particular in decisions about:

Materiality and audit risk;

(ii) The nature, timing and extent of the audit procedures used to meet the requirements of the SAS and gather audit evidence;

(iii) Evaluating whether sufficient appropriate audit evidence has been obtained, and whether more needs to be done to achieve the auditor’s overall objectives;

(iv) The evaluation of manager’s judgment in applying the financial reporting framework applicable to the audited entity;

(v) The drawing of conclusions from the audit evidence obtained.

48. Professional skepticism is fundamental to all audit engagements. The auditor plans and performs an assurance engagement with an attitude of professional skepticism, recognizing that circumstances may exist that cause the subject matter information to be materially misstated.

An attitude of professional skepticism means that the auditor makes a critical assessment, with a questioning mind, of the validity of the evidence obtained and is alert to evidence that contradicts or calls into question the reliability of documents or representations by the responsible party.

49. The requirements and specific guidance on professional judgment and professional skepticism are defined in SAS 1200.

Materiality

50. The auditor should apply the concept of materiality in an appropriate manner when planning and performing the audit.

51. A misstatement is material, individually or when aggregated with other misstatements, if it could reasonably be expected to influence the decisions taken by users on the basis of the financial statements.

Materiality has both quantitative and qualitative aspects. In the public sector, it is not limited to other decisions besides economic decisions by users based on financial statement. The qualitative aspects of materiality generally play a greater role in the public sector than in other types of entities. The assessment of materiality and the consideration of sensitivity and other qualitative factors in a particular audit are matters for the auditor’s judgment.

52. The auditor should consider applying materiality during the audit process to determine and assess risk, give opinion and make report in accordance with circumstances. The audit should consider materiality for each business and all aspects of financial statements.

53. The requirements and specific guidance on determination and application of materiality are prescribed in SAS 1320.

Documentation

54. The auditor should prepare full and timely audit documentation that is sufficient in conducted audit, gathered evidence and conclusion to enable an experienced auditor, with no prior knowledge of the audit, to understand audit process, incurred matter, gathered evidence, important professional judgment, auditors ‘opinion and requests.

55. The requirements and specific guidance on documentation are prescribed in SAS 1230.

Communication

56. The auditor should identify the appropriate contact person(s) communicate with them regarding the planned scope and timing of the audit and any significant findings.

57. The auditor should communicate with the head of audited entity.  <}0{>Communication entails obtaining information relevant to the audit and providing the head of audited entity with timely observations that are significant and relevant to their oversight of the financial reporting process.

It is important to promote effective two-way communication between the auditor and the audited entity.

58. Communication should be in multiple ways and with multiple relevant parties (other than those audited). Communication should be in writing if the auditor determines that oral communication is not sufficient.

59. The requirements and specific guidance on communication are prescribed in SAS 1260.

Principles related to the audit process

Planning

60. The unit taking charge of the audit (auditor) should survey and make an audit plan for all audits, ensuring effectiveness. The audit must determine objective, scope, content, schedule and resources as the basis for making detailed audit plan and conduct the audit in an effective and cost-efficient manner to lower risk.

61. Audit plan of each audit includes overall plan and detailed plan.

62. When preparing an audit plan, auditor must:

(i) Survey, gather information related to the audited unit and the audit;

(ii) Analyze the gathered information as the basis for preparing the overall audit plan;

(iii) Define objective, scope, content, method, schedules and resources necessary to perform the audit.

63. Overall audit plan consists of following contents:

(i) Objective;

(ii) Risk assessment; Materiality;

(iii) Subject matter; Method;

(iv) Scope;

(v) Ways to organize and schedule to conduct the audit;

64. The overall audit plan must be prepared and approved before conducting of each audit of the state audit office.

65. When developing detailed audit plans, the Head of audit Team and auditor must:

(i) Survey details of situation and the internal control system of the audited units;

(ii) Analyze the gathered information as the basis for determination of materiality, risk, sample and sample size; methods for each content and assertion.

66. Contents of a detailed audit plan consist of:

(i) Objective of detailed audit for each assertion of the items on the financial statements;

(ii) Content;

(iii) Scope and audited entity;

(iv) Risk, materiality and audit sample size determined for each content of the audit;

(v) Methods and procedures for auditing applicable in auditing each content and assertion.

67. Audit Program: Audit tasks are specified to each item, content and staff , schedule, method and procedure for performance of each audit task.

68. Both the overall plan and the detailed plan need to be documented and stored. They must also be Updated and adjusted, as necessary, during the course of the audit

69. The requirements and specific guidance on planning are prescribed in SAS 1300.

Understanding the audited entity

70. The auditor should have an understanding of the audited entity and its environment, including internal control procedures that are relevant to the audit.

71. Understanding the nature, organizational structure, resources and ability to mobilize the resources, operational environment, control environment, determination and assessment of risks, internal control systems of the audited unit shall help auditors determine and assess risks, from which to plan and perform audits effectively.

72. Auditing does not require an understanding of all the controls carried out for each significant class of transactions, account balance and disclosure in the financial statements, or for every relevant assertion..

However, the auditors should focus on assessing consistency in operating of the internal control system of audited entity.

73. The requirements and specific guidance on understanding the audited entity are prescribed in SAS 1315.

Risk assessment

74. The auditor should assess the risks of material misstatement at the financial statement level and the assertion level for classes of transactions, account balances and disclosures so as to provide a basis for designing and performing further audit procedures.

75. Risk assessment procedures may include:

(i) inquiries of the head and staff within the audited entity who, in the auditor’s judgment, may have information that could assist in identifying risks of material misstatement due to fraud or error;

(ii) Analytical procedures;

(iii) Observation and inspection.

76. The risks of material misstatement should be identified and assessed at both the financial statement level and the assertion level. For this purpose, the auditor needs to:

(i) identify risks throughout the process of obtaining an understanding of the audited entity and its environment, by examining relevant controls that relate to the risks and considering the classes of transactions, account balances and disclosures in the financial statements;

(ii) Assess the risks identified and evaluate whether they relate more pervasively to the financial statements as a whole and could potentially affect many assertions;

(iii) relate the risks identified to what could go wrong at the assertion level, taking account of relevant controls that the auditor intends to test;

(iv) Consider the likelihood of misstatement, including the possibility of multiple misstatements, and whether the potential for misstatement is such as to render it material.

77. The auditor should store in audit records information relating to the identification and assessment of risks of material misstatement at the financial statement level and the assertion level, and relevant control procedures that auditor has learned.

78. The requirements and specific guidance on determination and assessment of risk are prescribed in SAS 1315.

Responses to assessed risks

79. The auditor should act appropriately to address the assessed risks of material misstatement in the financial statements.

Responses to assessed risks include designing audit procedures that address the risks, such as substantive procedures and test of controls.

80. The nature, timing and extent of audit procedures are based on and are responsive to the assessed risk of material misstatement at the assertion level. In designing the necessary audit procedures, the auditor should consider the reasons for the assessed risks of material misstatement at the assertion level for each class of transactions, account balance and disclosure

Such reasons may include the inherent risk of transactions (the likelihood of material misstatement due to the particular characteristics of the relevant class of transactions, account balance or disclosure) and the control risk (whether the risk assessment takes account of relevant controls).

81. The auditor should design and perform tests of the relevant controls to obtain sufficient appropriate evidence as to their operating effectiveness. The auditor should consider that, when designing and performing so, the greater the reliance placed on the effectiveness of a control, the more persuasive should be the audit evidence obtained.

82. The auditor should design and perform substantive procedures for each material class of transactions, account balance and disclosure, irrespective of the assessed risks of material misstatement.

In addition, if the auditor has determined that an assessed risk of material misstatement at the assertion level is significant, substantive procedures should be performed that specifically respond to that risk. When the approach to a significant risk consists only of substantive procedures, those procedures should include tests of details.

83. The requirements and specific guidance on responses to assessed risks are prescribed in SAS 1330.

Considerations relating to fraud in an audit of financial statements

84. The auditor should identify and assess the risks of material misstatement in the financial statements due to fraud, should obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud and should respond appropriately to fraud or suspected fraud identified during the audit.

85. The primary responsibility for the prevention and detection of fraud rests with the audited entity’s Head. The auditor is responsible for obtaining reasonable assurance that the financial statements taken as a whole are free from material misstatement, whether caused by fraud or error.

86. Misstatements in the financial statements can arise from either fraud or error. The distinguishing factor is whether the action resulting in a misstatement was intentional or unintentional. Two types of intentional misstatements are relevant to the auditor – misstatements resulting from fraudulent financial reporting and those resulting from the misappropriation of assets.

87. The auditor is expected to maintain an attitude of professional skepticism throughout the audit, recognizing the possibility of material misstatement due to fraud at both the financial statement level and the assertion level for classes of transactions, account balances and disclosures, notwithstanding the auditor's past experience of the honesty and integrity of the audited entity’s head.

88. The requirements and specific guidance on considerations relating to fraud in an audit of financial statements are prescribed in SAS 1240.

Going-concern considerations

89. The auditor should consider whether there are events or conditions that may cast significant doubt on the audited entity’s ability to continue as a going concern.

90. Financial statements are normally prepared on the assumption that the audited entity is a going concern and will continue to meet its statutory obligations for the foreseeable future.

General-purpose financial statements are prepared on a going-concern basis unless competent agencies have decided to liquidate the audited entity or that it should cease operation.

91. The going-concern concept in public-sector may have little or no relevance for state-owned enterprises, economic organizations established by state for certain purposes.

92. The auditor should obtain sufficient appropriate audit evidence about the suitability of the audited unit head’s use of the going-concern assumption in the preparation and presentation of financial statements, and should conclude as to whether there is any material uncertainty about the audited entity’s ability to continue as a going concern.

93. The requirements and specific guidance on going-concern considerations are prescribed in SAS 1570.

Considerations relating to laws and regulations in an audit of financial statements

94. The auditor should identify the risks of material misstatement due to non-compliance with laws and regulations. Identification of such risks should be based on a general understanding of the legal provisions applicable to the specific environment in which the audited entity operates, including how the audited entity complies with legal provisions.

The auditor should obtain sufficient appropriate audit evidence regarding compliance with the laws and regulations that are generally recognized to have a direct and material effect on the determination of material amounts and disclosures in financial statements.

95. The auditor is expected to obtain reasonable assurance as to whether the financial statements, taken as a whole, are free from material misstatement, whether due to fraud or error.

Due to the inherent limitations of an audit, it often has inevitable risks in which some material misstatements may not be detected, even when the audit plan is prepared and the audit is conducted in accordance with SAS. So in this case, the auditor is not responsible for preventing non-compliance and cannot be expected to detect all breaches of laws and regulations.

96. The requirements and specific guidance on considerations relating to laws and regulations in an audit of financial statements are prescribed in SAS 1250.

Audit evidence

97. The auditor should identify and perform audit procedures in accordance with circumstances for the purpose of obtaining

Sufficient appropriate audit evidence and thus draw conclusions on which to base the auditor’s opinion. The auditor should consider the suitability and reliability of the information used as audit evidence.

98. Audit evidence should be sufficient and appropriate Sufficiency is a measure of the quantity of evidence, while appropriateness relates to the quality of evidence

The sufficiency and appropriateness of audit evidence have correlation. The quantity of evidence required depends on auditor’s assessment of the risk of material misstatement of the subject matter information and on the quality of such evidence

The greater the risk, the more evidence is likely to be required and the higher the quality, the less may be required. However, merely obtaining more evidence does not compensate for its poor quality.

99. The reliability of evidence is influenced by its source and nature, and is dependent on the specific circumstances in which the evidence was obtained.

100. Further guidance on audit evidence is included in SAS 1500.

Consideration of subsequent events

101. Events occurring after the date of the financial statements are those between the date of the financial statements and the date of the auditor’s report and matters that the auditor knows after the audit report is prepared.

102. The auditor should obtain sufficient appropriate audit evidence that all events occurring between the date of the financial statements and the date of the auditor’s report that require an adjustment to, or disclosure in, the financial statements have been identified.

The auditor is not, however, expected to perform additional audit procedures on matters to which previous audit procedures have provided satisfactory conclusions.

103. The requirements and specific guidance on consideration of subsequent events are specified in SAS1560.

Evaluating misstatements

104. Misstatement is the difference between the value, classification, presentation or disclosures of items in the financial statements with the value, classification, presentation or disclosures of such items under the applicable financial reporting framework. Misstatement can occur due to error or fraud.

105. The auditor should keep a full record of misstatements identified during the audit, and communicate to appropriate management level, unless the law does not allow.

106. The auditor needs to determine whether uncorrected misstatements are material, individually or in the aggregate as the basis for giving the opinion in the auditor’s report. To this end, the auditor should consider:

(i) The size and nature of the misstatements, in relation both to particular classes of transactions, account balances or disclosures and to the financial statements as a whole, and the particular circumstances of their occurrence;

(ii) The effect of uncorrected misstatements from prior periods on the relevant classes of transactions, account balances or disclosures, and on the financial statements as a whole.

107. The auditor should communicate with the head of the audited unit of misstatements and their effect of errors when considered individually or in the aggregate for audit opinions, especially material misstatement. If the audited unit does not agree to adjust material misstatements detected during the audit, the auditor must understand the causes of such refusal and assess the effect of this failure to adjust on the auditor’s opinion.

108. Further guidance on evaluating misstatements is included in SAS 1450.

Forming an opinion and reporting on the financial statements

109. The auditor should form an opinion based on an evaluation of the conclusions drawn from the audit evidence obtained, as to whether the financial statements, in all material respects, are prepared in accordance with the applicable financial reporting framework. The opinion should be expressed clearly in a written report that also describes the basis for the opinion.

110. The objectives of a financial audit in the public sector are often broader than expressing an opinion as to whether the financial statements have been prepared, in all material respects, in accordance with the applicable financial reporting framework. It may include other audit objectives such as: assessment of compliance with regulations, economy, efficiency and effectiveness.

Accordingly, the auditor should give the opinion on compliance with regulations, economy, efficiency and effectiveness of activities within audit scope based on the audit evidence obtained.

111. If an audit has additional objective of auditing economy, effectiveness and efficiency of operations, the auditor should adhere to the basic principles of performance auditing and the related guidance (SAS 300 and SAS 3000). If an audit has additional objective of auditing compliance, the auditor must comply with the basic principles of compliance audit and the related guidance (SAS 400, SAS 4000 and SAS 4200).

112. In order to form an opinion, the auditor must first conclude whether reasonable assurance has been obtained as to whether the financial statements as a whole are free from material misstatement, whether due to fraud or error

113. Further specific guidance on forming an opinion and reporting on the financial statements is included in SAS 1700.

Form of opinion

114. There are two forms of audit opinion: unqualified opinion and audit opinion that is not unqualified opinion.

Unqualified opinion is given when the auditor concludes that the financial statement, in all material respects, is consistent with the applicable financial reporting framework.

(ii) Audit opinion that is not unqualified opinion is given when:

. Based on audit evidence obtained, the auditor indicates that the financial statement as a whole includes material misstatement;

. The auditor fails to obtain appropriate audit evidence to give opinion that the financial statement as a whole does not include material misstatement;

Forms of audit opinion that is not unqualified opinion

115. There are three types of audit opinion that is not unqualified opinion:

(i) Qualified opinion: but except for

(ii)Adverse opinion: not true and fair view

(iii)Disclaimer: (no opinion)

116. Further guidance on form of opinion is included in SAS 1700 and SAS 1705.

Elements required in the auditor’s report

117. Financial audit report of the state audit office is documents prepared by the state auditor and published to assess, recognize, conclude and request for audited contents for financial information and financial statements.

118. The audit report must reflect the complete, accurate, honest and objective results, conclusions and auditors’ requests; confirm the correctness and truthfulness of the financial statements, budget financial statement.

119. The audit report must be made in accordance with provisions of the form of the state audit office and has legal value for the parties whose rights and obligations are related to (responsible party) to perform.

120. The audit report must comply with the following requirements:

(i) Correctness: Content and data in the audit report must be accurate; auditors ‘opinion and requests should be based on the audit evidence meeting requirements for fullness and appropriateness;

(ii) Constructiveness: Auditors ‘opinion and requests in the audit report must be constructive, helping the entity promote its advantages, strengths and remedy and rectify its errors and limitations;

(iii) Clearness and conciseness: The writing used in the audit report must be clear, concise and easy to understand, not causing many different interpretations for its users; report’s structure must be coherent and logic;

(iv) Timeliness: The audit report must be prepared and submitted on time as prescribed.

121. The content and structure of an audit report must comply with the regulations on forms, auditing records of the state audit office, in which the contents of the audit report typically includes: information on the audited entity, audit results (entity preparing audit report, basis of auditor’s opinion, auditor’s opinion, emphasis of matters and other issues, conclusions, requests and other contents if any), signature, stamp, signing date of the audit report and disclosures, appendix (if any).

122. If the auditor wishes to attract the attention of users to a presented matter or disclosed in financial statements, which, under the auditor's judgment, includes particularly important matter, the auditor should add the statement " emphasis of matter" in the audit report for users to understand easily, indicating that the auditor has obtained sufficient appropriate audit evidence and that the matter is free from material misstatement in the financial statement. Paragraph "emphasis of matter" is used to explain the matters that have been presented or disclosed in financial statements.

123. When presenting the "emphasis of matter" in the audit report, the auditor should:

(i) Present it immediately after the "auditor’s opinion";

(ii) Use the heading "emphasis of matter", or other appropriate headings;

(iii) Demonstrate a clear reference to the emphasis of matter and the related disclosures in the financial statements with the full description of the matter;

(iv) indicate that the auditor’s opinion is not modified in respect of the matter emphasized.

124. If  the auditor considers it necessary to communicate a matter, other than those that are presented or disclosed in the financial statements, which, in the auditor’s judgment, is relevant to users’ understanding of the audit, the auditor’s responsibilities or the auditor’s report, and provided this is not prohibited by law or regulation, this should be done in a paragraph with the heading “Other Matter,” or another appropriate heading. This paragraph should appear immediately after the opinion and any Emphasis of Matter paragraph (if any).

125. Further guidance on ‘emphasis of matter’’ and "Other matter" in audit report is included in SAS 1760.

Comparative information – corresponding figures and comparative financial statements

126. The auditor should consider comparative information – corresponding figures and comparative financial statements in order to determine whether the financial statements include the comparative information required by the applicable financial reporting framework, and whether such information is presented under uniform accounting methods and policies by the audited entity.

127. If the auditor becomes aware, during the current period, of a possible material misstatement in the comparative information, the auditor should perform such additional audit procedures as are necessary in the circumstances to obtain sufficient appropriate audit evidence as to determine whether a material misstatement exists.

128. Further guidance on comparative information – corresponding figures and comparative financial statements is included in SAS 1710.

The auditor’s responsibilities in relation to other information in documents containing audited financial statements

129. The auditor should read the other information in order to identify any material inconsistencies or material misstatement of fact with the audited financial statements.

If, on reading the other information, the auditor identifies a material inconsistency or material misstatement of fact, the auditor should communicate with the head of the audited entity, while obtaining and assessing its effect on financial statement in order to give opinion in the audit report.

130. Further guidance on the auditor’s responsibilities in relation to other information in documents containing audited financial statements is included in SAS 1720

Special considerations – audits of financial statements prepared in accordance with special-purpose frameworks

131. The auditor is required to determine the acceptability of the financial reporting framework that was applied when preparing the financial statements.

Special considerations consists of:

. The purpose for which the financial statements are prepared;

. The intended users;

. The steps taken by management to determine that the applicable financial reporting framework is acceptable in the circumstances.

132. In planning and performing an audit of special-purpose financial statements, the auditor should determine whether the circumstances of the engagement require special consideration to be given to application of the SAS.

133. When forming an opinion and reporting on special-purpose financial statements, the auditor should comply with the same requirements and guidance as for general-purpose financial statements

134. The auditor should include an ‘Emphasis of Matter paragraph’ alerting users to the fact that the financial statements have been prepared in accordance with a special-purpose framework and that, as a result, they may not be suitable for another purpose.

135. Requirements and further guidance on special considerations – audits of financial statements prepared in accordance with special-purpose financial statements is included in SAS 1800.

Special considerations – audits of single financial statements and specific elements, accounts or items of a financial statement

136. In the case of an audit of a single financial statement, or of a specific element, account or item of a financial statement, The auditor should determine whether application of the financial reporting framework will result in a presentation that provides adequate disclosure to enable the intended users to understand the information in the financial statement or the element thereof, as well as the effect of material transactions and events on that information.

137. Further guidance on special considerations – audits of single financial statements and specific elements, accounts or items of a financial statement is included in SAS 1850.

Considerations relevant to audits of group financial statements (including financial statements of the State budget)

138. Auditor engaged to audit group financial statements of a member unit or  subordinate unit should obtain sufficient appropriate audit evidence regarding the financial information and financial statement related to such unit and the consolidation process to express an opinion as to whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework.

139. From planning the audit, the auditor must consider requirements and regulations on the preparation and presentation of financial statements that are prepared from group financial statements of member unit or subordinate unit, as well as requirements for the cooperation in the audit process and use of the audit results in the audited member unit or subordinate unit and the financial statements of unaudited units.

140. The auditor should learn about the unit that has financial information consolidated, including the collection and preparation process of financial statement, to assess the risks of material misstatement in the audited financial statement. The principles for understanding the entity should include an understanding of its total organizational structure, role and relationships of member unit or subordinate unit, environments, control of internal control system, as well as supervision process of preparation of financial statement; material matter in financial audit of member unit or subordinate unit when it is being audited and financial statement is prepared from all financial statements of such unit, including financial statements of unaudited units.

141. Further guidance on considerations relevant to audits of group financial statements is included in SAS 1600

Monitoring and inspection of implementation of auditor’ requests in financial audit

142. All financial audits must be monitored, inspected the implementation of auditor’s conclusions and requests.  Monitoring and inspection of implementation of auditor’ conclusion and request must meet the following principles:

(i) Summarizing, monitoring, handling, reporting results is conducted regularly, periodically or at the request of competent authorities;

(ii) The monitoring and inspection are conducted based on the evidence of the implementation of auditor's conclusions and requests provided and submitted to The state audit office by audited unit; direct inspection is conducted at the audited unit and related units;

(iii) The order and content of work, duties and responsibilities of the units and departments involved in the inspection, summarizing, monitoring, handling and reporting results of the implementation of the auditor’s conclusion and request must comply with the Law on The state audit office and other relevant regulations of the state audit office.

 

 

 

 


------------------------------------------------------------------------------------------------------
This translation is made by LawSoft and for reference purposes only. Its copyright is owned by LawSoft and protected under Clause 2, Article 14 of the Law on Intellectual Property.Your comments are always welcomed

Đã xem:

Đánh giá:  
 

Thuộc tính Văn bản pháp luật 04/2014/QD-KTNN

Loại văn bảnQuyết định
Số hiệu04/2014/QD-KTNN
Cơ quan ban hành
Người ký
Ngày ban hành31/07/2014
Ngày hiệu lực14/09/2014
Ngày công báo...
Số công báo
Lĩnh vựcKế toán - Kiểm toán
Tình trạng hiệu lựcHết hiệu lực 15/09/2016
Cập nhật7 năm trước
Yêu cầu cập nhật văn bản này

Download Văn bản pháp luật 04/2014/QD-KTNN

Lược đồ Decision No. 04/2014/QD-KTNN issuing the state auditing standard No.200


Văn bản bị sửa đổi, bổ sung

    Văn bản sửa đổi, bổ sung

      Văn bản bị đính chính

        Văn bản được hướng dẫn

          Văn bản đính chính

            Văn bản bị thay thế

              Văn bản hiện thời

              Decision No. 04/2014/QD-KTNN issuing the state auditing standard No.200
              Loại văn bảnQuyết định
              Số hiệu04/2014/QD-KTNN
              Cơ quan ban hànhKiểm toán Nhà nước
              Người kýNguyễn Hữu Vạn
              Ngày ban hành31/07/2014
              Ngày hiệu lực14/09/2014
              Ngày công báo...
              Số công báo
              Lĩnh vựcKế toán - Kiểm toán
              Tình trạng hiệu lựcHết hiệu lực 15/09/2016
              Cập nhật7 năm trước

              Văn bản thay thế

                Văn bản được dẫn chiếu

                  Văn bản hướng dẫn

                    Văn bản được hợp nhất

                      Văn bản hợp nhất

                        Văn bản gốc Decision No. 04/2014/QD-KTNN issuing the state auditing standard No.200

                        Lịch sử hiệu lực Decision No. 04/2014/QD-KTNN issuing the state auditing standard No.200

                        • 31/07/2014

                          Văn bản được ban hành

                          Trạng thái: Chưa có hiệu lực

                        • 14/09/2014

                          Văn bản có hiệu lực

                          Trạng thái: Có hiệu lực