In order to facilitate understanding of the scope and authority of the pronouncements of the Auditing and Assurance

Standards Board ('AASB'), the ICAI has issued revised preface viz., Preface to Standards on Quality Control for
Auditing, Review, Other Assurance and Related Services, which has come into effect from 1st April, 2008.
Standards of the following nature issued by the AASB shall be collectively known as 'the Engagement Standards':

Standards on Quality Control (SQC) are applicable to the auditing firms which performs Audits and Reviews of
Historical Financial information and other Assurance and related services engagements.

Standards on Auditing (SAs), to be applied in the audit of historical financial information.

Standards on Review Engagements (SREs), to be applied in the review of historical financial information.

Standards on Assurance Engagements (SAEs), to be applied in assurance engagements, dealing with subject matters
other than historical financial information.

Standards on Related Services (SRSs), to be applied to engagements involving application of agreed upon
procedures to information, compilation engagements, and other related services engagements, as may be specified
by the ICAI.

Auditing and Assurance Standard ('AAS') have been re-numbered and classified in the above five categories as
Standards on Auditing:

AUDITS AND REVIEWS OF HISTORICAL FINANCIAL INFORMATION

SA Title of Standard on Auditing Effective

from
SQC1 Quality control for Firms that perform audits and reviews of historical financial 1-4-2009
information and other assurance and related services engagement
SA Standards on Auditing (SAs)
100 - 199 Introductory Matters
200 - 299 GENERAL PRINCIPLES AND RESPONSIBILITIES
200 Overall objectives of the Independent Auditor and the conduct of an audit, in 1-4-2010
accordance with standards on auditing
210* Agreeing the Terms of Audit Engagements 1-4-2010
220 Quality Control for an Audit of Financial Statements 1-4-2010
230 Audit Documentation 1-4-2009
240 The Auditor's Responsibilities relating to Fraud in an Audit of Financial Statements 1-4-2009
250 The Auditor's Responsibilities relating to Laws and Regulations in an Audit of 1-4-2009
Financial Statements
260 Communications with those Charged with Governance 1-4-2009
265 Communicating Deficiencies in internal control to those charged with Governance 1-4-2010
and management
299 Responsibilities of Joint Auditors 1-4-1996
300 - 499 RISK ASSESSMENT AND RESPONSE TO ASSESSED RISKS
 SA Title of Standard on Auditing Effective
from
300 Planning and Audit of Financial Statements 1-4-2008
315 Identifying and Assessing the Risks of Material Misstatement through understanding 1-4-2008
the Entity and its Environment
320 Materiality in Planning and performing an audit 1-4-2010
330 The Auditor's Responses to Assessed Risks 1-4-2008
402 Audit Considerations Relating to an Entity Using a Service Organisation 1-4-2010
450 Evaluation of misstatements identified during the audit 1-4-2010
500 - 599 AUDIT EVIDENCE
500 Audit Evidence 1-4-2009
501 Audit Evidence - Specific Considerations for selected Items 1-4-2010
505 External Confirmations 1-4-2010
510 Initial Audit Engagements - Opening Balances 1-4-2010
520 Analytical Procedures 1-4-2010
530 Audit Sampling 1-4-2009
540 Auditing Accounting Estimates, including fair value estimates, and related disclosures 1-4-2009
550 Related Parties 1-4-2010
560 Subsequent Events 1-4-2009
570 Going Concern 1-4-2009
580 Written Representation 1-4-2009
600 - 699 USING WORK OF OTHERS
600 Special consideration audits of group financial statements under (including the work
of component auditors) consideration of the Board
610 Using the Work of Internal Auditor 1-4-2010
620* Using the Work of an auditor's Expert 1-4-2010
700 - 799 AUDIT CONCLUSIONS AND REPORTING
700 Forming an Opinion and Reporting on Financial Statements 1-4-2012
705 Modifications to the Opinion in the Independent Auditor's Report 1-4-2012
706 Emphasis of matter Paragraphs and Other Matter Paragraphs in the Independent 1-4-2012
Auditor's Report
710 Revised Comparative Information- corresponding figures and Comparative financial 1-4-2011
Statements
720 Auditor's Responsibility in Relation to Other Information in Documents containing 1-4-2010
Audited Financial Statements
800 - 899 SPECIALIZED AREAS
800 Special Considerations- Audits of Financial Statements prepared in accordance with 1-4-2011
 SA Title of Standard on Auditing Effective
from
special purpose framework
805 Special Considerations- Audits of single purpose financial statements and specific 1-4-2011
elements, accounts, or items of a financial statement
810 Engagements to report on summary financial statements 1-4-2011
SRE 2000 - STANDARDS ON REVIEW ENGAGEMENTS (SREs)
2699
2400 Engagements to Review Financial Statements 1-4-2010
2410 Review of Interim Financial Information performed by the independent auditor of the 1-4-2010
entity
ASSURANCE ENGAGEMENTS OTHER THAN AUDITS OR REVIEWS OF
HISTORICAL FINANCE INFORMATION
SAE3000 - STANDARDS ON ASSURANCE ENGAGEMENTS (SAEs)
3699
3000 - 3399 APPLICABLE TO ALL ASSURANCE ENGAGEMENTS
3400 - 3699 SUBJECT SPECIFIC STANDARDS
3400 The Examination of Prospective Financial Information 1-4-2007
3410 Assurance report on controls at a service organisation 1-4-2011
RELATED SERVICES
SRS 4000 - STANDARDS ON RELATED SERVICES (SRSs)
4699
4400 Engagements to Perform Agreed-upon Procedures Regarding Financial Information 1-4-2004
4410 Engagements to Compile Financial Information 1-4-2004

* General clarification issued in respect of these standards.

STANDARD ON QUALITY CONTROL (SQC) 1

QUALITY CONTROL FOR FIRMS THAT PERFORM AUDITS AND REVIEWS OF HISTORICAL
FINANCIAL INFORMATION, AND OTHER ASSURANCE AND RELATED SERVICES
ENGAGEMENTS (Effective for all engagements relating to accounting periods beginning on or after April 1,
2009)

Introduction

The firm should establish a system of quality control designed to provide it with reasonable assurance that the firm
and its personnel comply with professional standards, regulatory, legal requirements, and that reports issued by the
firm or engagement partner(s) are appropriate in the circumstances.

Elements of a System of Quality Control

The firm's system of quality control should include policies and procedures on the following elements:
  Leadership responsibilities for quality within the firm.
 Ethical requirements.
 Acceptance and continuance of client relationships and specific engagements.
 Human resources.
 Engagement performance.
 Monitoring.

Policies and procedures should be documented and communicated.

Leadership Responsibilities for Quality

Within the firm policies and procedures should be designed to promote an internal culture that quality is essential in
performing engagements. It should require that if appropriate, the firm's highest authority to assume ultimate
responsibility for the system of quality control.

Any person or persons assigned responsibility for quality control system should have sufficient and appropriate
experience, ability, and the necessary authority.

Ethical Requirements

Policies and procedures to provide with reasonable assurance that all concerned comply with relevant ethical
requirements.

Policies and procedures should emphasise the fundamental principles, e.g

 The leadership of the firm,

 Education and training,
 Monitoring, and
 A process for dealing with non-compliance

Independence

Establish policies and procedures to provide with reasonable assurance that all concerned, maintain independence
where required by the Code. It should enable the firm to:

a. Communicate its independence requirements and

b. Identify and evaluate circumstances and relationships that create threats to independence, and to take
appropriate action to eliminate or reduce those threats to an acceptable level by applying safeguards, or, if
considered appropriate, to withdraw from the engagement.

Such policies and procedures should require:

a. Personnel to provide the firm with relevant information about client engagements, the scope of services, to
evaluate the overall impact on independence requirements;
b. Personnel to promptly notify circumstances and relationships that create a threat to independence for taking
appropriate action and
 c. Accumulate and communicate relevant information to appropriate personnel so that:
 All can readily determine about satisfaction of independence requirements;
 Maintain and update records relating to independence; and
 Take appropriate action regarding identified threats to independence.

Provide reasonable assurance that it is notified about breaches of independence requirements, and to enable it to take
appropriate actions to resolve such situations, which include:

 All to promptly notify on becoming aware about the breaches of independence;

 All to promptly communicate identified breaches of these policies and procedures to:
 - The one who needs to address the breach; and
 - Those who need to take appropriate action; and
 Promptly communicate to all about the actions taken to resolve the matter.
 Annually, the firm should obtain written confirmation of compliance with its policies and procedures on
independence from all firm personnel
 Setting out criteria for determining the safeguards to reduce the familiarity threat to an acceptable level
over a long period of time; and
 For all audits of financial statements of listed entities, requiring the rotation of the engagement partner after
a specified period in compliance with the Code. Partner should be rotated after a pre-defined period,
normally not more than seven years.