SA 500 – Audit Evidence, SA 315 Risk Assessment Procedure
and Related Activities & SA 330 The Auditor’s Responses To Assessed Risks
are three most important Standards on Auditing.
On detail scrutiny student may come to following conclusion.
1.
SA 500 gives the auditor these weapons
Inspection, Recalculation, Observation,
Reperformance, Analytical Procedure, Inquiry, & External Confirmations,
2.
After conducting Risk Assessment Procedure
and Related Activities in accordance with SA 315 Identifying and Assessing
The Risk of Material Misstatement Through Understanding The Entity and Its
Environment, the auditor comes to know vulnerable area from audit point of
view.
3.
Now the auditor has identified & Assessed Misstatements
& he has weapons also. He just need to set each & every misstatement.
He has to use several weapons against several misstatements. Which weapon is
most appropriate for misstatements, those are explained in SA 330 under the
head “Overall Responses”
4.
SA 450 is practically performed by each one of
us. It’s procedure to br followed while evaluating the misstatements during the
audit.
5.
SA 240 is the combination of SA 315, SA 330
& SA 450 for FRAUD.
6.
SA 240 is the combination of SA 315, SA 330
& SA 450 for the audit of Service organizations.
Here is the memory tip in SA 500 Methods of obtaining Audit
evidences
Memory Tip :- Institute RO RAIE.
Institute – Inspection;
R – Recalculation;
O – Observation;
R – Reperformance;
A – Analytical Procedure;
I – Inquiry; &
E – External Confirmations.
Note – This procedure of SA 500, 315, 330 & 450 is
practically followed in the big CA firms.
Very
important to note that most of the SA are of such kind that name of the SA
suggest their objectives or the objectives of an auditor & then objectives
in turn are elaborated in SA.
Therefore
reading & understanding objectives is MOST IMPORTANT.
MY SINCERE
APOLOGY FROM ICAI TO MAKE IT CRY IN A MEMORY TIP.