Page 172 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Reference to Modification: Even if the modified opinion, Emphasis of matter paragraph, or Other matter
paragraph on the complete set of financial statements doesn’t pertain to the audited statement or element, the
auditor might find it apt to mention the modification in an Other matter paragraph. This is deemed relevant for
users’ understanding of the audited statement, element, or the associated auditor’s report.
Other SAs: SA 800 and 805 do not supersede the stipulations of other SAs. They also don’t claim to address all
special considerations that might be pertinent in the engagement circumstances.

(CNO SA- 805.120) Examples of Specific Elements, Accounts or Items of a Financial Statement are:
(Shortcut: TEA Schedule)
Schedule of Net Tangible Assets: A schedule of net tangible assets, including related notes, is also an example
of a specific element of a financial statement.
Schedule of Externally Managed Assets: Another example is a schedule of externally managed assets and
income of a private pension plan, including related notes.
Accounts Receivable and Related Items: Examples include accounts receivable, allowance for doubtful
accounts receivable, inventory, the liability for accrued benefits of a private pension plan, the recorded value of
identified intangible assets, or the liability for “incurred but not reported” claims in an insurance portfolio,
including related notes.
Schedule of Disbursements: Lastly, a schedule of disbursements in relation to a lease property, including
explanatory notes, is an example of a specific item of a financial statement.

SA 810 - ENGAGEMENTS TO REPORT ON SUMMARY FINANCIAL STATEMENTS

(CNO SA- 810.020) Introduction
SA 810 - SA 810 deals with the auditor’s responsibilities when undertaking an engagement to report on summary
financial statements derived from financial statements audited in accordance with SAs by that same auditor.
What do Summary Financial Statements Reflect?
Summary financial statements reflect historical financial information that is derived from financial statements,
but that contains less detail than the financial statements. They still provide a structured representation
consistent with that provided by the financial statements of the entity’s economic resources or obligations at a
point in time or the changes therein for a period of time.

(CNO SA- 810.040) Engagement Acceptance – Primary Condition.

Auditor of FST: The auditor shall, ordinarily, accept an engagement to report on summary financial statements
in accordance with this SA only when the auditor has been engaged to conduct an audit in accordance with
SAs of the financial statements from which the summary financial statements are derived.
Necessary Knowledge: If the auditor has not also audited the financial statements from which the summary
financial statements are derived, the auditor shall not have the necessary knowledge to discharge his
responsibilities in relation to the summary financial statements in accordance with this SA.
Herein lies the rationale behind the requirement that engagement to report on summary financial statements
shall, ordinarily, be accepted when the auditor has been engaged to conduct an audit of financial statements
from which summary financial statements are derived.
Engagement Acceptance – Further Conditions.

Before accepting an engagement to report on summary financial statements, the auditor shall:
a) Determine whether the applied criteria are acceptable
1. Applied Criteria: Applied criteria refer to the criteria applied by management in the preparation of the
summary financial statements. Management is responsible for the determination of the information that needs

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