Implemented successfully, the International Standards on Auditing (UK) (ISAs (UK)) can help auditors boost efficiency, improve documentation, provide better reporting to clients, and enhance audit quality. But implementing ISAs (UK) present a number of practical challenges for auditors.
These guides have been developed to help practitioners performing audits of small and medium-sized entities to better understand ISA (UK) requirements. The guides focus on key implementation issues and do not address all ISA (UK) requirements or look at ISAs (UK) already addressed in other ICAEW guidance.
How the guides will help you
The guides are primarily intended to help auditors implement ISAs (UK) successfully.
What's in the guides?
These guides focus specifically on ISA (UK) requirements as published by the UK Financial Reporting Council (FRC).
They explore the overall objective of the audit in ISAs (UK) and how this impacts on agreeing engagement terms with the client.
The guides cover challenges such as how the auditor deals with understanding internal control in smaller audits, and provide practical guidance on issues, including: management override and accounting estimates.
The guides also deal with:
- the requirement to document significant judgements;
- how judgements are ultimately reported to those charged with governance;
- the need to obtain confirmations from external parties;
- written representations from management; and
- reporting requirements.
The application material in the ISAs includes considerations specific to smaller entities where these are relevant.
These guides build on content originally included in ICAEW’s "Right First Time with the Clarified ISAs" which was published in 2010.
| Guide | Relevant ISAs |
| The importance of achieving the objectives in an ISA (UK) audit | ISA (UK) 200 (Revised June 2016) Overall objectives of the independent auditor and the conduct of the audit in accordance with ISAs |
| Agreeing the terms of audit engagements in an ISA (UK) audit | ISA (UK) 210 (Revised June 2016) Agreeing the terms of audit engagements |
| Documenting significant professional judgements in an ISA (UK) audit | ISA (UK) 230 (Revised June 2016) Audit documentation |
| Addressing the risk of management override in an ISA (UK) audit | ISA (UK) 240 (Revised June 2016) The auditor’s responsibilities in relation to fraud in an audit of financial statements |
| Communication with those charged with governance in an ISA (UK) audit | ISA (UK) 260 (Revised June 2016) Communication with those charged with governance ISA 265 Communicating deficiencies in internal control to those charged with governance |
| Understanding internal control in a smaller ISA (UK) audit | ISA (UK) 315 (Revised June 2016) Identifying and assessing risks of material misstatement through understanding the entity and its environment |
| Using external confirmations in an ISA (UK) audit | ISA (UK) 505 External confirmations |
| Auditing accounting estimates in an ISA (UK) audit (updated August 2019) |
ISA (UK) 540 (Revised December 2018) Auditing accounting estimates and related disclosures |
| Auditing accounting estimates in an ISA (UK) audit | ISA (UK) 540 (Revised June 2016) Auditing accounting estimates, including fair value accounting estimates and related disclosures |
| Obtaining written representations in an ISA (UK) audit | ISA (UK) 580 Written representations |
| Reporting in an ISA (UK) audit | ISA (UK) 700 (Revised June 2016) Forming an opinion and reporting on financial statements ISA (UK) 701 Communicating key audit matters in the independent auditor’s report ISA (UK) 705 (Revised June 2016) Modification to the opinion in the Independent Auditor’s report ISA (UK) 706 (Revised June 2016) Emphasis of matter paragraphs and other matter paragraphs in the Independent Auditor’s report ISA (UK) 570 (Revised June 2016) Going concern ISA (UK) 720 (Revised June 2016) The auditor’s responsibilities relating to other information ISA (UK) 260 (Revised June 2016) Communication with those charged with governance |
- ISAs (UK) are accessible from the Financial Reporting Council's website.
- All references to "ISAs" in the guides refer to "ISAs (UK)" and are just abbreviated for ease of reference.
ICAEW and ISAs
ICAEW has long been a champion of International Standards on Auditing (ISAs). Through the work of its ISA Panel (established in 2005 as the ISA Implementation sub group) it has overseen numerous roadshows, events and publications and engaged with and sought feedback from firms of all sizes, regulators, standard-setters and training, methodology and software providers on ISA implementation as well as commented on any revisions to the ISAs.
Copyright notice
Extracts from ISAs (UK) are adapted and reproduced with the kind permission of the Financial Reporting Council. All rights reserved. For further information please visit www.frc.org.uk or call +44 (0)20 7492 2300.
