International Standards on Auditing (ISAs)
Core structure to master
Candidates must navigate the ISA framework: the ISQC 1 / ISQM quality management standards, the ISA 200 overarching principles (reasonable assurance, professional skepticism, materiality, risk-based approach), and the engagement lifecycle - ISA 210 (terms), ISA 220 (quality management on an audit), ISA 300 (planning), ISA 315 (Revised) (risk identification), ISA 320 (materiality), ISA 330 (responses to assessed risks), ISA 500–580 (evidence), ISA 700-series (reporting), and ISA 600 (group audits).
Traps in exam questions
- Treating reasonable assurance as absolute assurance.
- Forgetting that professional skepticism is required throughout, not only during risk assessment.
- Confusing the auditor's responsibilities with management's responsibilities (e.g., preparing financial statements, designing controls).
- Misapplying materiality as a single fixed number rather than a judgment applied at planning, performance, and evaluation stages.
- Confusing ISA 315 (identify/assess risks) with ISA 330 (design responses).
Rule of thumb
Every ISA question can usually be answered by asking: Whose responsibility is this, and at which stage of the audit does it occur? Management prepares and controls; the auditor obtains evidence and expresses an opinion.
Worked example
A question asks what the auditor should do when the client refuses to allow confirmation of receivables. Under ISA 505, alternative procedures are performed; if evidence remains insufficient, this is a scope limitation that may lead to a qualified opinion or disclaimer under ISA 705.