NFRA’s Interpretation on SA 200
- Blog|News|Account & Audit|
- 2 Min Read
- By Taxmann
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- Last Updated on 5 November, 2022
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“Auditor” is used to refer to the person or persons conducting the audit, usually the engagement partner (EP) or other members of the engagement team (ET), or, as applicable, the firm. Where an SA expressly intends that a requirement or responsibility be fulfilled by the engagement partner, then the term “engagement partner” rather than “auditor” is used. “Engagement partner” and “firm” are to be read as referring to their public sector equivalents where relevant.
Thus, the term ‘auditor’ includes other persons which are conducting the audit and are members of the firm. Engagement Quality Control Review (EQCR) team members also carry out the audit of the client and are members of the firm. The definition does not restrict the scope of term ‘auditor’ to only the ET. Further, the definition specifically intends that if a requirement or responsibility is to be fulfilled by the EP, the word “EP” is used. Hence, the SAs use the term “EP” or “EQCR” if it intends that as a requirement. Otherwise, the term “Auditor” is used. Therefore, the term “auditor” covers EQCR and SA 230 applies to the documentation of Engagement Quality Control Reviewer also.
The Audit Firm’s assertion that the auditing standards are “not prescriptive but are principle based” and it is not possible to make “extensive detailing in work papers on compliance with each para of the standards of auditing” is incorrect. Such an understanding and application of the standards of auditing goes against the fundamental and mandatory nature of the standards.
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