Auditing and Assurance Standards and Guidance

Auditing Standards (Ireland)

FRC ISAs (UK and Ireland) applicable for periods beginning on or after 15 December 2010 but before 17 June 2016

ISA (UK and Ireland) 200 Overall objectives of the independent auditor and the conduct of an audit in accordance with International Standards on Auditing (UK and Ireland)

Application and Other Explanatory Material

Sufficient Appropriate Audit Evidence and Audit Risk (Ref: Para. 5 and 17 )

Inherent Limitations of an Audit

Other Matters that Affect the Inherent Limitations of an Audit

A51.	In the case of certain assertions or subject matters, the potential effects of the inherent limitations on the auditor's ability to detect material misstatements are particularly significant. Such assertions or subject matters include:

Fraud, particularly fraud involving senior management or collusion. See ISA (UK and Ireland) 240 for further discussion.

The existence and completeness of related party relationships and transactions. See ISA (UK and Ireland) 55023 for further discussion.

The occurrence of non-compliance with laws and regulations. See ISA (UK and Ireland) 25024 for further discussion.

Future events or conditions that may cause an entity to cease to continue as a going concern. See ISA (UK and Ireland) 57025 for further discussion.

Relevant ISAs (UK and Ireland) identify specific audit procedures to assist in mitigating the effect of the inherent limitations.

A52.

Because of the inherent limitations of an audit, there is an unavoidable risk that some material misstatements of the financial statements may not be detected, even though the audit is properly planned and performed in accordance with ISAs (UK and Ireland). Accordingly, the subsequent discovery of a material misstatement of the financial statements resulting from fraud or error does not by itself indicate a failure to conduct an audit in accordance with ISAs (UK and Ireland). However, the inherent limitations of an audit are not a justification for the auditor to be satisfied with less-than-persuasive audit evidence. Whether the auditor has performed an audit in accordance with ISAs is determined by the audit procedures performed in the circumstances, the sufficiency and appropriateness of the audit evidence obtained as a result thereof and the suitability of the auditor's report based on an evaluation of that evidence in light of the overall objectives of the auditor.

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