Page 11 - CA Inter Audit PARAM

CA Ravi Taori

Statements and Guidance Notes of ICAI Old Course -- (P16M/M16M/M16R/M18M/N18R/M19M)
QNO
Bhaskar CNO SAINTRO.180
SAINTRO.05

"Statements" and "Guidance Notes" of ICAI- whether mandatory or recommendatory? Discuss

Answer ➢ AUTHORITY ATTACHED TO THE DOCUMENTS ISSUED BY THE INSTITUTE/MCA

Statements / Standards Mandatory
The Institute has from time to time, issued ‘Guidance Notes’ and ‘Statements’ on a number
of matters. The ‘Statements’ have been issued with a view to securing compliance by
members on matters which, in the opinion of the Council, are critical for the proper
discharge of their functions. ‘Statements’ therefore are mandatory.

Duty of Auditor for Statements / Standards
Accordingly, while discharging their attest function, it will be the duty of the members of
the Institute:
• to examine whether ‘Statements’ relating to accounting matters are complied
with in the presentation of financial statements covered by their audit. In the
event of any deviation from the ‘Statements’, it will be their duty to make
adequate disclosures in their audit reports so that the users of financial
statements may be aware of such deviations; and
• to ensure that the ‘Statements’ relating to auditing matters are followed in the
audit 0of financial information covered by their audit reports. If, for any reason, a
member has not been able to perform an audit in accordance with such
‘Statements’, his report should draw attention to the material departures,
therefrom.

Guidance Notes Recommendatory
‘Guidance Notes’ are primarily designed to provide guidance to members on matters which
may arise in the course of their professional work and on which they may rely in the course
of their professional work and on which they may desire assistance in resolving issues which
may pose difficulty. Guidance Notes are recommendatory in nature. A member should
ordinarily follow recommendations in a guidance note relating to an auditing matter except
where he is satisfied that in the circumstances of the case, it may not be necessary to do so.

Duty of Auditor for Guidance Note
Similarly, while discharging his attest function, a member should examine whether the
recommendations in a guidance note relating to an accounting matter have been followed
or not. If the same have not been followed, the member should consider whether keeping
in view the circumstances of the case, a disclosure in his report is necessary.
Author’s Note
These two paragraphs in Duty of Auditor for Statements / Standards can be explained in just one line
that “it is auditor’s duty to comply with statements on accounting / accounting standards and
statements on auditing /standards on auditing”

QNO Types of Standards Old Course -- (P16M/M19R/N20E)
SAINTRO.07 Bhaskar CNO - SAINTRO.060
Standards collectively known as the Engagements Standards issued by AASB under the authority of
the council of ICAI – Discuss.

OR
State the Standards issued by AASB which are collectively known as engagement standards.
Answer ➢ Engagement Standards:
www.auditguru.in 1.4