Specialised Audits and Assurance Engagements
Domain 5 tests distinguishing audit, review, other assurance and related-services work, and applying the correct standard to specialised engagements.
Engagement map
- Review of historical financial information: SRE 2400 or SRE 2410, providing limited assurance through inquiry and analytical procedures.
- Other assurance: SSAE 3000; SAE 3400 for prospective financial information; SAE 3402 for service organisations.
- Agreed-upon procedures: SRS 4400, which reports factual findings and gives no assurance.
- Specialised statutory audits include co-operative societies, LLPs, trusts and tax audits; each has its own statute and reporting format.
Worked example
A client asks the firm to check a royalty statement against the licence agreement. The firm agrees specific procedures: recompute royalties at stated rates, agree sales to invoices and test deductions. The report states the procedures and findings, such as “royalty understated by ₹4.2 lakh.” It does not say the statement is fairly presented. The reasoning is that users draw their own conclusions; an assurance conclusion would require an assurance engagement and evidence against suitable criteria.
Traps
Using audit-opinion language in an AUP report; giving negative assurance in an AUP; performing a review without inquiry and analytics; and ignoring the independence and ethical requirements applicable to the engagement.