Special Considerations — Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement
CAS 805
Special Considerations — Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement
CAS 805
Scope of this CAS
- CAS 805 deals with audit of a single F/S or of a specific element, account or item of a F/S
- Examples of specific elements, accounts or items of a F/S
- Accounts receivable, inventory, the recorded value of identified intangible assets
- A schedule of net tangible assets, including related notes
- A schedule of disbursements in relation to a lease property
Considerations When Accepting the Engagement
- Must comply with all other CASs relevant to the audit
- If the auditor is not also engaged to audit the entity’s complete set of F/S, determine whether the audit of a single F/S or of a specific element of those F/S is practicable
- Determine the acceptability of the financial reporting framework used to prepare the F/S
- The financial reporting framework should result in a presentation that provides adequate disclosures to enable the intended users to understand the information conveyed in the F/S or the element, and the effect of material transactions and events
- The engagement letter should mention the expected form of any reports to be issued by the auditor
- If the auditor takes on an engagement to report on a single F/S or on a specific element of a F/S in conjunction with an engagement to audit the entity’s complete set F/S, express a separate opinion for each engagement
- If the opinion in the auditor’s report on an entity’s complete set of F/S is modified, or that report includes an Emphasis of Matter paragraph or an Other Matter paragraph, determine the effect that this may have on the auditor’s report on a single F/S or on a specific element of those F/S
- If the auditor expresses an adverse opinion or disclaimer of an opinion on the complete set of F/S, the auditor is not allowed to include in the same auditor’s report an unmodified opinion on a single F/S or a specific element that forms part of those F/S
- Doing so would contradict the adverse opinion or disclaimer of opinion on the whole F/S
- If the auditor expresses an adverse opinion or disclaimer of an opinion on the entity’s complete set of F/S but in the audit of a specific element the auditor considers it appropriate to express an unmodified opinion on that element, the auditor should only express an unmodified opinion if:
- The auditor is not barred by law or regulation from doing so
- That opinion is expressed in an auditor’s report that is not published together with the auditor’s report containing the adverse opinion or disclaimer of opinion
- The specific element does not constitute a major portion of the entity’s complete set of F/S
- The auditor is not allowed to express an unmodified opinion on a single F/S of a complete set of F/S (i.e. the income statement) if the auditor has expressed an adverse opinion or disclaimed an opinion on the complete set of F/S as a whole (even if the auditor’s report on the single F/S is not published together with the auditor’s report containing the adverse or disclaimer of opinion)
- This is because a single F/S is deemed to constitute a major portion of those F/S