Summary of ISA 200 – Overall objectives of the independent auditor by ISAs

Scope of ISA 200

Isa 200 deals with the auditor’s overall responsibilities for conducting an audit of a financial statement in accordance with international standards of auditing.

Audit of financial statement

1. The purpose of the audit is to enhance the degree of confidence in the set of financial statements. The confidence is acquired by the auditor’s opinion on the set of financial statements based on audit procedures performed and audit evidence collected. The opinion describes if financial statements were prepared in line with the applicable financial reporting framework and gives a true and fair view.
2. The audit does not relieve management/those charged with governance from their responsibilities, and ISAs do not override laws and regulations that govern their responsibilities.
3. The auditor is responsible for obtaining reasonable assurance (a high level of assurance but not absolute) that the financial statements are free from material misstatement due to fraud and error.
4. The concept of materiality is applied in planning, executing, and concluding an audit of the financial statement. The auditor’s opinion is based on material information; therefore, the auditor is not responsible and is not expected to detect immaterial misstatements.

Objectives of auditor

Following are the objectives of auditing financial statements.

1. To obtain reasonable assurance that the financial statement is free from material misstatement due to fraud/misstatement and that the financial statement is prepared in all material aspects.
2. Formulate an audit report on the financial statement.

Requirements of ISA 200

Following are the requirements of ISA 200.

1. Comply with ethical and independent requirements.
2. Plan and perform audits with professional skepticism.
3. Apply professional judgment while auditing financial statements.
4. Obtain Sufficient and appropriate audit evidence.
5. Conduct audits in line with ISAs.

Wrap up

ISA 200 defines the auditor’s responsibility for setting the objectives of the independent auditor in line with the international standard of auditing. The auditor is responsible for obtaining sufficient and appropriate audit evidence on the financial statement set.

The auditor must plan and perform an audit considering ethical requirements, independence, professional judgment, and professional skepticism, and conduct an audit in line with applicable auditing standards.