International Standards on Auditing (ISA)
Comprehensive Explanatory Notes
ISA 200 – Overall Objectives of the Independent Auditor and the Conduct of an
Audit in Accordance with ISAs
Defines the overall objective of the auditor to obtain reasonable assurance that financial
statements are free from material misstatement and to express an opinion. Emphasises
professional scepticism, professional judgement, ethical requirements, and inherent
limitations of an audit.
ISA 210 – Agreeing the Terms of Audit Engagements
Requires agreement of audit terms with management through an engagement letter.
Ensures preconditions for an audit exist, including management’s responsibility for
financial statements and internal control.
ISA 220 (Revised) – Quality Management for an Audit of Financial Statements
Requires the engagement partner to manage and achieve audit quality. Covers leadership,
ethics, independence, competence of the audit team, supervision, review, and consultation.
ISA 230 – Audit Documentation
Requires auditors to prepare sufficient and appropriate documentation to support the audit
opinion and demonstrate compliance with ISAs.
ISA 240 – The Auditor’s Responsibilities Relating to Fraud in an Audit of
Financial Statements
Deals with identifying and responding to fraud risks. Requires professional scepticism,
fraud risk assessment, and specific focus on revenue recognition fraud.
ISA 250 – Consideration of Laws and Regulations in an Audit of Financial
Statements
Explains auditor responsibilities regarding compliance with laws and regulations and
actions required when non-compliance is identified.
ISA 260 (Revised) – Communication with Those Charged with Governance
Requires timely communication of audit scope, significant risks, findings, deficiencies, and
independence matters to those charged with governance.
ISA 265 – Communicating Deficiencies in Internal Control to Those Charged with
Governance and Management
Requires communication of significant internal control deficiencies identified during the
audit.
ISA 300 – Planning an Audit of Financial Statements
Requires the auditor to plan the audit to ensure it is performed effectively, including
establishing the overall audit strategy and audit plan.
ISA 315 (Revised) – Identifying and Assessing the Risks of Material
Misstatement
Requires understanding the entity, its environment, and internal control to identify and
assess risks of material misstatement.
ISA 320 – Materiality in Planning and Performing an Audit
Explains how materiality and performance materiality are determined and applied
throughout the audit.
ISA 330 – The Auditor’s Responses to Assessed Risks
Requires the auditor to design and perform audit procedures responsive to assessed risks
of material misstatement.
ISA 402 – Audit Considerations Relating to an Entity Using a Service
Organization
Provides guidance when an entity uses a service organisation and how the auditor
considers related controls.
ISA 450 – Evaluation of Misstatements Identified During the Audit
Requires accumulation, evaluation, and communication of misstatements identified during
the audit.
ISA 500 – Audit Evidence
Establishes principles relating to obtaining sufficient and appropriate audit evidence.
ISA 501 – Audit Evidence – Specific Considerations for Selected Items
Provides guidance on inventory, litigation and claims, and segment information.
ISA 505 – External Confirmations
Deals with the use of external confirmations as audit evidence and related procedures.
ISA 510 – Initial Audit Engagements – Opening Balances
Explains auditor responsibilities relating to opening balances in initial audits.
ISA 520 – Analytical Procedures
Provides guidance on the use of analytical procedures during planning, substantive testing,
and overall review.
ISA 530 – Audit Sampling
Explains statistical and non-statistical sampling methods and evaluation of sample results.
ISA 540 (Revised) – Auditing Accounting Estimates and Related Disclosures
Addresses auditing of accounting estimates involving significant judgement, including
estimation uncertainty and management bias.
ISA 550 – Related Parties
Requires identification and appropriate disclosure of related party relationships and
transactions.
ISA 560 – Subsequent Events
Explains auditor responsibilities relating to events occurring after the reporting period.
ISA 570 (Revised) – Going Concern
Requires evaluation of management’s assessment of the entity’s ability to continue as a
going concern.
ISA 580 – Written Representations
Deals with obtaining written representations from management to support audit evidence.
ISA 600 – Special Considerations – Audits of Group Financial Statements
Addresses group audits and responsibilities relating to component auditors.
ISA 610 (Revised) – Using the Work of Internal Auditors
Provides guidance on evaluating and using the work of internal auditors.
ISA 620 – Using the Work of an Auditor’s Expert
Explains how the auditor uses the work of experts such as valuers or actuaries.
ISA 700 (Revised) – Forming an Opinion and Reporting on Financial Statements
Explains how the auditor forms an opinion and the structure of the auditor’s report.
ISA 701 – Communicating Key Audit Matters in the Independent Auditor’s
Report
Requires communication of key audit matters for listed entities.
ISA 705 (Revised) – Modifications to the Opinion in the Independent Auditor’s
Report
Deals with qualified, adverse, and disclaimer opinions.
ISA 706 (Revised) – Emphasis of Matter Paragraphs and Other Matter
Paragraphs
Explains inclusion of emphasis of matter and other matter paragraphs in the audit report.
ISA 710 – Comparative Information – Corresponding Figures and Comparative
Financial Statements
Provides guidance on audit responsibilities relating to comparative information.
ISA 720 (Revised) – The Auditor’s Responsibilities Relating to Other Information
Deals with auditor responsibilities relating to other information accompanying audited
financial statements.