Page 150 - AAA Integrated Workbook STUDENT S18-J19

Chapter 93 4

Initial engagements

ISA 510 Initial Engagements – Opening Balances provides the following guidance.

6.1 Auditor objectives

The auditor must ensure that:

 Opening balances do not contain material misstatements.

 Appropriate accounting policies have been consistently applied, or changes
adequately disclosed.

6.2 Audit procedures

 Read the most recent financial statements an auditor’s report.

 Determine whether the prior period’s closing balances have been correctly
brought forward or restated.

 Determine whether the opening balances reflect the application of appropriate
accounting policies.

 Reviewing the previous auditor’s working papers.

 Evaluate whether audit procedures performed in the current period provide
evidence relevant to opening balances.

 Substantive testing of any opening balances where the above procedures are
unsatisfactory.

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