Key points from ISA 200 (Overall objective of independent auditor and the conduct of an audit in accordance with ISAs

Key points from ISA 200 (Overall objective of the independent auditor and the conduct of an audit in accordance with ISAs).

After reading ISA 200 here are key points I have taken from it:

This international standard on Auditing (ISA) deals with an independent auditor’s overall responsibilities when conducting an audit of financial statements in accordance with ISAs

ISA 200 explains the scope, authority, and structure of ISAs.

ISAs are written in the context of an audit of financial statements by an auditor. They are to be adopted as necessary in a circumstance when applied to the audit of other historical financial information.



The purpose of an audit is to enhance the degree of confidence of the intended user in the financial statements. This is achieved by the expression of an opinion by the auditor on whether the financial statements are prepared in all material respect in accordance with the applicable financial reporting framework. An audit conducted in accordance with ISAs and relevant ethical requirements enables the auditor to form that opinion.

 Management and those charged with governance must accept their responsibilities on financial statements in order to enable an auditor to conduct the audit in accordance with ISAs.

The audit of financial statements does not relieve management or those charged with governance of their responsibilities.



ISA 200 requires the auditor to obtain reasonable assurance about the truth and fairness of financial statements as the basis of his opinion. Reasonable assurance is obtained when the auditor has obtained sufficient appropriate audit evidence to reduce audit risk to the acceptably low level.

The auditor is also required by ISA 200 to apply the concept of materiality when planning and performing the audit and when evaluating the effects of identified misstatements on the audit and of uncorrected misstatements on the financial statements.

A misstatement is considered to be material when individually or in aggregate they can reasonably affect the economic decision of the user of financial statements.

ISA 200 states that the auditor is not responsible for misstatements that are not material to financial statements as a whole.

ISAs in their structure contains objectives, requirements, and application and other explanatory material that are designed to support the auditor in obtaining reasonable assurance.



ISA 200 requires that the auditor exercise professional judgment and maintain professional skepticism throughout the planning and performance of the audit and also when:

  1. Assessing the risk of material misstatement;
  2. when obtaining sufficient appropriate audit evidence;
  3. And when forming an opinion on financial statements based on the conclusion drawn from the audit, evidence was obtained.

The form of audit opinion expressed by the auditor will depend on upon applicable financial reporting framework and any applicable law and regulation.

The auditor during an audit may also have certain other communication and reporting responsibilities to users, management, those charged with governance, or parties outside the entity in relation to matters arising from the audit. These may be established by ISA or applicable laws and regulations.

In conducting an audit of the financial statement the overall objective of the auditor is to obtain reasonable assurance and to report on the financial statement and communicate as required by ISA, in accordance with the auditor’s findings.

In case the auditor fails to obtain sufficient and appropriate audit evidence and the situation is pervasive, the auditor should disclaim the opinion or withdraw (resign) from the engagement, where withdrawal is possible under applicable laws and regulations.



The auditor is required by ISA 200 to comply with all relevant ethical requirements, including those pertaining to independence, relating to the financial statement audit engagement.

ISA 200 requires the auditor to comply with all ISAs relevant to the audit. The ISA is relevant to the audit when the ISA is in effect and circumstances addressed by the ISA exist.

The auditor is not permitted to state that he has complied with  ISAs in his report unless he has complied with the requirement of ISA 200 and all other ISAs relevant to the audit.

The situation when an auditor may not comply with ISAs include:

  1. When the entire ISA is not relevant;
  2. When the requirement of the ISA is conditional and the condition does not exist. For example, ISA 610 gives a guide on how auditors may use the work of internal auditors, thus if the entity does not have internal auditors then the ISA does not apply.



When auditors judge it necessary to depart from the requirement of ISA he should perform an alternative audit procedure to achieve the aim of that procedure.

If the objective is relevant ISA cannot be achieved, the auditor is required to evaluate if the inability to achieve the objective will prevent the auditor from achieving the overall objective of the audit, and if so the auditor is required to modify the auditor’s opinion or withdraw from the engagement.

7 thoughts on “Key points from ISA 200 (Overall objective of the independent auditor and the conduct of an audit in accordance with ISAs).”

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