PSA 210

Philippine Standard on Auditing 210

TERMS OF AUDIT ENGAGEMENTS

Auditing Standards and Practices Council

PSA 210

PHILIPPINE STANDARD ON AUDITING 210

TERMS OF AUDIT ENGAGEMENTS

CONTENTS

Paragraphs

Introduction 1-4

Audit Engagement Letters 5-9

Recurring Audits 10-11

Acceptance of a Change in Engagement 12-19

Effective Date 20-21

Acknowledgment 22-23

Appendix: Example of an Audit Engagement Letter

Philippine Standards on Auditing (PSAs) are to be applied in the audit of financial statements.

PSAs are also to be applied, adapted as necessary, to the audit of other information and to

related services.

PSAs contain the basic principles and essential procedures (identified in bold type black

lettering) together with related guidance in the form of explanatory and other material. The

basic principles and essential procedures are to be interpreted in the context of the explanatory

and other material that provide guidance for their application.

To understand and apply the basic principles and essential procedures together with the related

guidance, it is necessary to consider the whole text of the PSA including explanatory and other

material contained in the PSA not just that text which is black lettered.

In exceptional circumstances, an auditor may judge it necessary to depart from a PSA in order

to more effectively achieve the objective of an audit. When such a situation arises, the auditor

should be prepared to justify the departure.

PSAs need only be applied to material matters.

PSA 210

The PSAs issued by the Auditing Standards Practices Council (Council) are based on

International Standards on Auditing (ISAs) issued by the International Auditing Practices

Committee of the International Federation of Accountants.

The ISAs on which the PSAs are based are generally applicable to the public sector, including

government business enterprises. However, the applicability of the equivalent PSAs on

Philippine public sector entities has not been addressed by the Council. It is the understanding

of the Council that this matter will be addressed by the Commission on Audit itself in due

course. Accordingly, the Public Sector Perspective set out at the end of an ISA has not been

adopted into the PSAs.

PSA 210

Terms of Audit Engagements

Introduction

1. The purpose of this Philippine Standard on Auditing (PSA) is to establish

standards and provide guidance on: