WHAT ARE ACCOUNTING STANDARD Accounting standard represents a codification of the best practices in the field of auditing.

Auditing standards are therefore, the performance benchmarks for the auditors. Auditing standards contain guidance for the professionals on how they carry out their professional engagements. They cover the basic principles and essentials procedures to apply those basic principles that relates to the judgment or behavior. Auditing standards are framed to ensure probity, integrity and quality in the professional's work, essential for ensuring the confidence of the society in the financial information being reported by the business enterprises. NEED FOR ACCOUNTING STANDARDS. Accounting standards play a critical role in Ensuring application of accepted financial reporting standards thereby lending credibility and wider acceptability to the financial statements. Providing benchmark against which the performance of the members can be measured and evaluated at global level also. Ensuring compliance with the applicable legislative and regulatory framework. Ensuring right approach of the professionals in complex/ emerging areas of audit. Ensuring consistency and quality in the work performed by the professionals

SA AND OBJECTIVES OF AUDIT FS( financial statements) in accordance with financial reporting framework: The standard on auditing are formulated by the ICAI in the context of an audit of financial statements by an independent auditor. the objective of an audit of financial statements is to enable the auditor to express an opnion whether the financial statements are prepared, in all material aspects, in accordance with an application financial reporting framework. it is undertaken to enhance the degree of confidence of intended users in the financial statements. the standards on auditing, taken together, provide the standards for the auditors work in fulfilling the objective. FS free from material misstatements;

In conducting an audit, the overall objective of the auditor is to obtain reasonable assurance about whether the financial statement as a whole are free from material misstatement, whether due to fraud or error, and to report on the financial statements in accordance with the auditor's findings. Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements will not be detected, even though the audit is properly planned and performed in accordance with the SA's. In all cases, when this overall objective has not been or cannot be achieved, the SA's require the auditor to modify the auditor's opinion accordingly or withdraw from the engagement as may be appropriate, depending upon the facts and circumstances of each case engagement as may be appropriate, depending upon the facts and circumstance sin each case.

OBJECTIVES The objectives of the auditor are to: (a) Form an opinion on the financial statements based on an evaluation of the conclusions drawn from the audit evidence obtained; and (b) Express clearly that opinion through a written report that also describes the basis for the opinion. DEFINITIONS For purposes of the SAs, the following terms have the meanings attributed below: General purpose financial statements Financial statements prepared in accordance with a general purpose framework General purpose framework A financial reporting framework designed to meet the common financial information needs of a wide range of users. The financial reporting framework may be a fair presentation framework or a compliance framework. The term fair presentation framework is used to refer to a financial reporting framework that requires compliance with the requirements of the framework and: Acknowledges explicitly or implicitly that, to achieve fair presentation of the financial statements, it may be necessary for management to provide disclosures beyond those specifically required by the framework; or

 Acknowledges explicitly that it may be necessary for management to depart from a requirement of the framework to achieve fair presentation of the financial statements. Such departures are expected to be necessary only in extremely rare circumstances. The term compliance framework is used to refer to a financial reporting framework that requires compliance with the requirements of the framework, but does not contain the acknowledgements in (i) or (ii) above

Unmodified opinion The opinion expressed by the auditor when the auditor concludes that the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework9 Reference to financial statements in this SA means a complete set of general purpose financial statements, including the related notes. The related notes ordinarily comprise a summary of significant accounting policies and other explanatory information. The requirements of the applicable financial reporting framework determine the form and content of the financial statements, and what constitutes a complete set of financial statements. Reference to Financial Reporting Standards in this SA means the Accounting Standards promulgated by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI) or Accounting Standards, notified by the Central Government by publishing the same as the Companies (Accounting Standards) Rules, 2006, or the Accounting Standards for Local Bodies promulgated by the Committee on Accounting Standards for Local Bodies (CASLB) of the Institute of Chartered Accountants of India, as may be applicable. REQUIREMENTS SHALL: The requirements of each SA are contained in a separate section and expressed using the word "shall". COMPLIANCE: THE auditor complies with the requirement of an SA in all cases where they are relevant in the circumstances of the audit. NON-COMLIANCE: the auditor is not required to comply with a requirement that is not relevant in the circumstances of the audit and this does not constitute a departure from the requirement. However the auditor should document the steps undertaken by him to satisfy

himself that the process adopted in the circumstances of the audit assisted him in achieving the overall objective. DEPARTURE: In exceptional circumstances, the auditor may judge it necessary to depart from a relevant requirement by performing alternate audit procedures to achieve the aim of that requirement. The need for the auditor to depart from a relevant requirement is expected to arise only where the requirement is for a specific procedure to be performed and, in the specific circumstances of the audit, that procedure would be ineffective. When it is necessary for the auditor to depart from a requiremnt of an SA, the auditor is required to document how alternative procedures performed achieve the aim of the requirement, and, the reasons for the departure. auditor's report also should draw attention to such departures. However, a mere disclosure in his report does not absolve an auditor from complying with the applicable standard.