Chapter 08: Specialised Areas (SA 800, 805, 810)
1. SA 800 Series Master Triad Overview
The 800 series applies the general principles of auditing (SA 200–700 series) to specialised audit engagements.
| Standard | Engagement Focus | Key Application Scenario |
|---|---|---|
| SA 800 | Special Purpose Financial Statements | Financial statements prepared for specific users (tax basis, cash receipts & disbursements for creditors, contractual provisions). |
| SA 805 | Single Financial Statement or Specific Element / Item | Audit of a single statement (e.g., Balance Sheet only) or specific account (e.g., Accounts Receivable, Inventory, Royalties schedule). |
| SA 810 | Summary Financial Statements | Engagement to report on financial statements derived from audited FS prepared in accordance with applied criteria (e.g., abridged FS in prospectus). |
2. SA 800: Special Purpose Financial Statements
Core Definition & Framework Types
Special Purpose Framework: A financial reporting framework designed to meet the financial information needs of specific users. Can be either a fair presentation framework or a compliance framework.
Examples: Cash receipts & disbursements basis, tax accounting framework, regulatory framework prescribed by contract or grant.
| Auditor's Duty | Mandatory Action / Reporting Protocol |
|---|---|
| Engagement Acceptance | Determine acceptability of framework; obtain understanding of purpose, intended users, and management steps taken to determine framework acceptability. |
| Planning & Conduct | Comply with ALL relevant SAs. Apply professional judgment regarding how SAs apply to the special purpose circumstances. |
| Auditor's Report EOM | Include an Emphasis of Matter (EOM) paragraph alerting users that the financial statements are prepared in accordance with a special purpose framework and, as a result, may not be suitable for another purpose. |
| Distribution Restriction | May include alert restricting distribution or use solely to intended users. |
3. SA 805: Single FS or Specific Element / Item
Auditing a single statement (e.g., Statement of Cash Flows) or a specific component (e.g., Accounts Receivables, Inventory provision).
| Critical Consideration | Rule / Standard Directive |
|---|---|
| Separate Materiality | Materiality determined for a single element is typically substantially lower than materiality for the complete set of financial statements. |
| Audit of Related Elements | Auditor must perform procedures on interrelated items (e.g., sales when auditing accounts receivable; purchases when auditing inventory). |
| Opinion Independence | Separate opinion required for single FS / element. If complete set is audited as well, single FS opinion cannot be published together without clear separation. |
| Adverse / Disclaimer on Complete Set (CRITICAL TRAP) | If complete FS has Adverse Opinion or Disclaimer, auditor CANNOT express an unmodified opinion on a single financial statement of that set or a major element (as it would contradict the disclaimer/adverse opinion). Exception: Permitted ONLY if the specific element does not constitute a major portion of complete FS and the report on element is NOT published together with auditor's report on complete FS. |
4. SA 810: Summary Financial Statements
Preconditions for Acceptance
Auditor must accept an engagement to report on summary financial statements ONLY IF the auditor has been engaged to conduct the audit of the full financial statements from which summary statements are derived.
| Topic | Specific Rule / Reporting Mandate |
|---|---|
| Applied Criteria | Criteria applied by management in preparation must be established, available, and adequately disclosed in the summary FS. |
| Core Audit Procedures | Evaluate whether summary FS adequately disclose their summarised nature, identify the audited FS, agree with or can be recalculated from audited FS, and contain necessary information. |
| Opinion Phrasing | Unmodified Opinion states: "The summary financial statements are consistent, in all material respects, with the audited financial statements, in accordance with [applied criteria]." |
| Impact of Modified Opinion on Complete FS | If complete FS had Qualified/Adverse/Disclaimer, the summary FS report MUST state that fact, describe the basis of modification, and describe its effect on summary FS. |