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June 2022

WHAT IS SPECIAL ABOUT SPECIAL PURPOSE FRAMEWORK? WHEN TO APPLY SA 700 VS. SA 800?

By Meghdoot Jajoo
Chartered Accountant
Reading Time 9 mins
The article discusses when auditor issues report under Standard on Auditing (SA) 700 – Forming an Opinion and Reporting on Financial Statements vs. SA 800 – Special Considerations – Audit of Financial Statements Prepared in Accordance with Special Purpose Frameworks.

SPECIAL PURPOSE FINANCIAL STATEMENTS
SA 800 defines special purpose financial statements as financial statements prepared in accordance with a special purpose framework. SA 210 – Agreeing the Terms of Audit Engagements states that a condition for acceptance of an assurance engagement is that the criteria referred to in the definition of an assurance engagement are suitable and available to intended users. Therefore, it is imperative that for auditing special purpose financial statements, intended users is one of the key considerations.

Having said that, the manner of opining on special purpose financial statements is similar to opining on general purpose financial statements. SA 800 requires the auditor to apply the requirements of SA 700 when forming an opinion and reporting on special purpose financial statements. Similarly, title of audit reports for both the types of financial statements remain the same i.e. “Independent Auditor’s Report”.

What are the examples when special purpose financial statements are prepared and when general purpose financial statements are prepared?


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