Auditing and Assurance Standards

Members' handbook volume III – "Auditing and assurance standards"
 
To access the members' handbook, please click here.

Auditing and assurance standards
Auditing and assurance standards in Hong Kong are known as Hong Kong standards on quality management, auditing, assurance and related services.
 
The preface to Hong Kong standards on quality management, auditing, assurance and related services sets out the objectives and due process of the Institute council in respect to Hong Kong standards on quality management, auditing, assurance and related services.
 
The term "Hong Kong standards on quality management, auditing, assurance and related services" includes:

• Hong Kong standards on quality management (HKSQMs)
• Hong Kong framework for assurance engagements
• Hong Kong standards on auditing (HKSAs)
• Hong Kong standards on auditing for audits of financial statements of less complex entities (HKSA for LCE)
• Hong Kong standards on review engagements (HKSREs)
• Hong Kong standards on assurance engagements (HKSAEs)
• Hong Kong standards on investment circular reporting engagements (HKSIRs)
• Hong Kong standards on related services (HKSRSs)

HKSQMs establish basic principles and essential procedures and provide guidance regarding a firm's responsibilities for its quality management for Hong Kong engagement standards.
 
HKSAs, the HKSA for LCE, HKSREs, HKSAEs, HKSIRs and HKSRSs are collectively referred to as Hong Kong engagement standards.

Hong Kong standards to be applied in the audit of historical financial information are: 

• HKSAs; or
• HKSA for LCE, which may only be applied in accordance with the preface and the authority set out in the HKSA for LCE.

HKSREs are applied in the review of historical financial information.
 
HKSAEs are to be applied in assurance engagements dealing with subject matters other than historical financial information.
 
HKSIRs are applied in investment circular reporting engagements.
 
HKSRSs are applied to compilation engagements, engagements to apply agreed-upon procedures to information and other related services engagements.
 
Practice notes/guidelines
Practice notes/guidelines are issued to assist auditors in applying Hong Kong Engagement Standards of general application to particular circumstances and industries.

Due process and comparison with International Standards on Auditing
This page links to the full text of the following documents (available in Adobe Acrobat format).

• Due process of auditing and assurance standards-setting
  
  • Due process to adopt international standards on auditing (Available in Preface to the Hong Kong Quality Management, Auditing, Review, Other Assurance, and Related Services Pronouncements - Appendix 2: Page 13) 
  • Due process in the development of local practice notes/guidance (Available in Preface to the Hong Kong Quality Management, Auditing, Review, Other Assurance, and Related Services Pronouncements - Appendix 3: Page 14)
  • Comparison Table of International and Hong Kong Quality Management, Auditing, Review, Other Assurance, and Related Services Pronouncements
• International Auditing and Assurance Standards Board (IAASB) 

Criteria for adding projects onto the Auditing and Assurance Standards Committee (AASC) work plan

The Institute receives frequent requests from stakeholders to develop local auditing and assurance pronouncements, in particular, Practice Notes or Circulars for particular assurance engagements. 

The AASC has a set of criteria for assessing projects for inclusion on the committee’s work plan. The assessment will be carried out in Q4 every year for potential inclusion on the following year’s work plan. AASC will be updated regularly of requests received.  

The project assessment criteria are as follows:

(a) Public interest benefits

(b) Relevance

(c) Urgency

(d) Achievability

Any interested party can submit a Request Form to the Institute at aae@hkicpa.org.hk setting out the detailed background information for the request and the rationale for developing local auditing and assurance pronouncements with reference to the criteria set out above. Requests received will be batched and assessed in Q4 every year. The Standard Setting Department will contact the submitter whose request has been added onto the AASC work plan in Q1 the following year for follow-up actions.