ISA Audit of Special Purpose

Financial Statement
800

AUDIT Subsidiary

AUDIT MI

AUDIT CLIENT In India

Incorporated in UK
 Objectives C. FORMING AN OPINION AND REPORTING ON FS
C1. Application of ISA 700 revised when reporting on SPFS
• Acceptance of audit engagement
Audit of Special Purpose
ISA • Planning and performance of that engagement • Going Concern: Going concern may or may not be prepared – for
Financial Statement e.g. FS prepared for tax purpose
800 • Forming an opinion and reporting on FS
• KAM: If required by law or regulation or auditor decides to
Special purpose financial statements communicate
• Other Information: ISA 720 apply
General purpose financial statements • Name of EP: Applied to the Special purpose FS of listed entities
For eg:
• Inclusion of reference in the Auditors report on complete set of
• tax basis of accounting
General purpose FS: may deem it appropriate to refer in OMP to
Financial statements prepared in accordance with • Cash receipt and disbursement basis for creditors
the auditor’s report on complete set of General purpose FS
a general purpose framework • Financial reporting provision established by
regulator C2. Description of AFRF
Special purpose financial statements • Financial reporting provision of a contract
Adequately disclose in the FS about the basis of preparation. If
Requirement management has choice, include in the MR that Management is
responsible for determining the acceptability of FRF
Prepared in a/c with Special Purpose framework.
A. WHEN TO ACCEPT ENGAGEMENT: C3. Alerting Reader and Restriction on distribution use:
General purpose framework • Acceptability of FRF – purpose, intended user & EOMP – FS are prepared in a/c with SPF and may not be suitable for
steps by management to determine that FRF is another purpose and restriction on distribution
A financial reporting framework designed to meet
acceptable
the common financial information needs of a wide
range of users
B. PLANNING AND PERFORMING
Special Purpose framework
• Comply with relevant ethical requirement
including independence
Designed to meet the financial information need • Adapt other ISA as necessary
of specific users. • If lower threshold determined by the user, still
needs to calculate materiality
Scope • Check management selection and application of
accounting policy
• 100 – 720 applies to audit of FS • If SPFS prepared in a/c with contract – read and
• 800 applies to complete set of FS prepared in a/c understand contract
with the SPF
 ISA Audit of Special Purpose
Financial Statement
800

C2. Description of AFRF

Example
PIA
Financial Statement
Revenue 100
Expenses 250
Gross loss 150
Admin Expense 150
Net loss 400
Cash Flow Basis
Revenue 100
Expenses 60
Profit 40
 Responsibilities of Management and Those Charged
Other Matter Paragraph with Governance for the Financial Statements

The company has prepared a separate set of Management is responsible for the preparation of the financial statements in
financial statement for the year ended 31 dec 2001 accordance with the financial reporting provisions of Section Z of the contract and
Audit of Special Purpose
ISA in accordance with the IFRS on which we issued a for such internal control as management determines is necessary to enable the
Financial Statement preparation of financial statements that are free from material misstatement,
800 separate auditor’s report to the share holder of
whether due to fraud or error.
the comapny dated 31 march 2002.
In preparing the financial statements, management is responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
INDEPENDENT AUDITOR'S REPORT applicable, matters relating to going concern and using the going concern basis of
[Appropriate Addressee] accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Opinion
Those charged with governance are responsible for overseeing the Company's
We have audited the financial statements of ABC Company (the Company), which comprise financial reporting process.
the balance sheet as at December 31, 20X1, and the income statement,statement of changes in
equity and cash flow statement for the year then ended, and notes to the financial statements, Auditor's Responsibilities for the Audit of the
including a summary of significant accounting policies. Financial Statements
In our opinion, these FS are prepared in accordance with the uk gap.
Our objectives are to obtain reasonable assurance about whether the financial
In our opinion, these FS are prepared in accordance with the indian accounting standard. statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a material misstatement
Basis for Opinion when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to
We conducted our audit in accordance with International Standards on Auditing (ISAS). Our
influence the economic decisions of users taken on the basis of these financial
responsibilities under those standards are further described in the Auditor's Responsibilities
statements.
for the Audit of the Financial Statements section of our report. We are independent of the
Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in [jurisdiction], and we have fulfilled our other ethical responsibilities
in accordance with these requirements. We believe that the audit evidence we have ob-
tained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter - Basis of Accounting and Restriction on Distribution and Use

We draw attention to Note X to the financial statements, which describes the basis of accounting.
The financial statements are prepared to assist the Company in complying with the financial
reporting provisions of the contract referred to above. As a result, the financial statements may
not be suitable for another purpose. Our report is intended solely for the Company and DEF
Company and should not be distributed to or used by parties other than the Company or DEF
Company. Our opinion is not modified in respect of this matter.