New Delhi: The Institute of Chartered Accountants of India (ICAI) has approved four new Standards on Auditing (SA).
All these SAs have been approved as important aspects in the audit process such as fair value, audit sampling, analytical procedures and opening balances.
"These new standards are more elaborate as they provide ample application guidance on various concepts discussed in the standards", an official release from ICAI said.
The decision to introduce the new SAs was taken at the 283rd meeting of ICAI held recently. The new SAs have been named as SA 540, 530, 510 and 550. SA 530 and 540 will be applicable from April 1, 2009 and latter two will be applicable form April 2010.
Special guidance has been given to auditors in SA 540 while verifying the valuation of complex financial instruments which are not traded in active and open market and transactions involving the exchange parties without monetary consideration.
The revised SA 530 guides auditors while using sampling techniques in their audit assignments, and covers both statistical and non-statistical sampling.
SA 510 deals with auditor's responsibility with respect to opening balances when performing initial audit engagements.
SA 550 is aimed at strengthening current auditing practice in this area by emphasizing the need for the auditor to understand related party relationships and transactions in order to identify the risks of material misstatement to which these may give rise, and directing the auditor to focus work effort on the assessed risks of material misstatement, including those due to fraud.
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