1. The ISSAIs for Financial Audit ISSAIs 1000-2999

2. Why considering the ISSAIs on Financial Audit?
give confidence and credibility in our work as auditors
provide the basis for high quality audits
are the basis for professionalism in our operations

3. ISSAIs on Financial Audit
36 ISAs and PNs
ISAs include requirements and application material
ISAs are principle based
ISAs include a large number of requirements on the auditor
PNs provide public sector relevant guidance to the ISAs

4. ISSAIs on Financial Audit
Specialized areas
General principles and responsibilities
Audit conclusions and reporting
Using the work of others
Risk assessment and responses to assessed risks
Audit Evidence
In addition; ISSAI 1000 and a glossary

5. Reference to authoritative standards and authority of the guidelines
ISSAIs on Financial Audit
ISAs
INTOSAI Fundamental Principles
Other relevant standards
Auditors can make use of the ISSAIs on Financial Audit in different ways, depending on the standards applied.
Full compliance with the ISSAIs on Financial Audit means that the audit is conducted in accordance with the relevant ISAs and the additional guidance set out in the Practice Notes.
Using the ISAs as your authoritative standards means ensuring full compliance with all relevant ISAs. In this case, the material in the Practice Notes can be used to support the application of ISAs when relevant.
If you refer to the INTOSAI Fundamental Principles as your standards, both ISAs and Practice Notes can be considered guidance material. In such case the requirements of the ISAs, formulated as “shall” in the standards are to be read as “may” statements.
The ISSAIs can of course also be used to support other standards in developing audit manuals or specific guidelines.
The Supreme Audit Institution should, however, choose one of these alternatives and specify in the audits what standards are applied.
The auditor shall comply with all ISAs relevant to the audit. An ISA is relevant to the audit when the ISA is in effect and the circumstances addressed by the ISA exist.
The auditor shall have an understanding of the entire text of an ISA, including its application and other explanatory material, to understand its objectives and to apply its requirements properly.
The auditor shall not represent compliance with ISAs in the auditor’s report unless the auditor has complied with the requirements of all other ISAs relevant to the audit.

6. Extract from the Auditor’s Report
Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with [International Standards on Auditing]/ International Standards of Supreme Audit Institutions, the ISSAIs, on Financial Audit. Those standards require that we…………

7. What does it mean by applying the ISSAIs as standards?
Full compliance with all ISAs (included in the ISSAIs) relevant for the audit.
A relevant code of ethics
Quality Control procedures according to ISQC1 or ISSAI 40
Reference to the ISSAIs in the report

8. “An audit is an audit”
Users, whether of large or small entity financial statements, receive audit reports expressing opinions, and users assume, and need to have confidence, that those opinions are based on same level of assurance.

9. Some basic concepts
Considerations of the Financial Reporting Framework
Risk based approach
Professional judgment
Professional skepticism

10. Considerations of the Financial Reporting Framework
Preconditions:
The use of an acceptable financial reporting framework
Agreement that TCWG agrees the premises on which an audit is conducted

11. The use of an acceptable financial reporting framework
The auditor shall determine whether the FRF is acceptable;
The nature of the entity;
The purpose of the financial statements;
The nature of the financial statements; and
Whether law or regulation prescribes the applicable financial reporting framework.
The nature of the entity (for example, whether it is a business enterprise, a public sector entity or a not for profit organization);
The purpose of the financial statements (for example, whether they are prepared to meet the common financial information needs of a wide range of users or the financial information needs of specific users);
The nature of the financial statements (for example, whether the financial statements are a complete set of financial statements or a single financial statement); and
Whether law or regulation prescribes the applicable financial reporting framework.

12. Agreement that TCWG agrees the premises on which an audit is conducted
TCWG responsible for the preparation
TCWG responsible for such internal controls needed for preparation of financial statements
TCWG responsible for providing access to all relevant information

13. Risk based approach
“The objective of the auditor is to identify and assess the risks of material misstatement, whether due to fraud or error, at the financial statement and assertion levels, through understanding the entity and its environment, including the entity’s internal control, thereby providing a basis for designing and implementing responses to the assessed risks of material misstatement.”
ISSAI 1315

14. Professional judgment
The auditor shall exercise professional judgment in planning and performing an audit of financial statements
Essential to proper conduct of an audit
Judgment is not to be used as the justification for decisions that are not supported by the facts and circumstances or sufficient appropriate audit evidence
Need to consult on difficult or contentious matters and for significant judgments to be evidenced

15. Professional skepticism
The auditor shall plan and perform an audit with professional skepticism recognizing that circumstances may exist that cause the financial statements to be materially misstated.
Critical assessment
Questioning mind
Alert to evidence that contradicts or questions the reliability of evidence
An attitude of professional skepticism means the practitioner makes a critical assessment,
with a questioning mind, of the validity of evidence obtained and is alert to
evidence that contradicts or brings into question the reliability of documents or
representations by the responsible party. For example, an attitude of
professional skepticism is necessary throughout the engagement process for
the practitioner to reduce the risk of overlooking suspicious circumstances, of
over generalizing when drawing conclusions from observations, and of using
faulty assumptions in determining the nature, timing and extent of evidence
gathering procedures and evaluating the results thereof.

16. Summary Comprehensive set of standards
To make reference to the use- need to comply with all relevant ISAs/ISSAIs
Key concepts;
Considerations of the Financial Reporting Framework
Risk based approach
Professional judgment
Professional skepticism

17. Implementation Initial assessment: Implementation options
Requirements in national context
Current audit environment
Resources needed
Implementation process
Cooperation options
I would like to highlight some issues related to implementation of the ISSAIs on Financial Audit. When considering implementation of the financial audit guidelines, the first step is to assess what to implement and how to do this.
Will your organization need the ISSAIs as authoritative standards, as guidance or to support other standards? In some countries, the audit law, regulation or mandate may prescribe which standards to apply. In cases where other standards are prescribed, implementation of the ISSAIs as guidelines to support such standards may still be an option. In other environments, the SAI can independently decide on what standards to use. Any organization using the ISAs as the authoritative standards needs to consider the authority of the ISAs. In short this means you are required to comply with all ISAs relevant for the audit.
To determine what is needed to make implementation possible, each organization needs to assess:
Whether the audit regulation or mandate prescribe the use of specific standards
Specific requirements that influence the way to adopt the ISSAIs, and
The need to implement other INTOSAI standards or guidance to support the ISSAIs on Financial Audit for responsibilities relating to reporting on the financial statements.
For example, SAIs who have responsibilities related to the regularity of transactions may need to consider adoption of the INTOSAI Compliance Audit Guidelines. Other SAIs may need to develop their own guidelines for areas not covered by the INTOSAI framework.