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| Bangladesh Standard on Audit(BSA-510) |
Bangladesh Standard on Audit(BSA-510)-Describes in details:
BSA-510: Initial Engagements – Opening Balances is a standard set by the Institute of Chartered Accountants of Bangladesh (ICAB), which provides guidelines for auditors when they are auditing an entity for the first time or when there is a change in the auditor. It focuses on how to handle the opening balances in such engagements.
In short, BSA-510 addresses the following key points:
1.Auditor's Responsibility:
The auditor is responsible for obtaining sufficient appropriate audit evidence about the opening balances, especially when the opening balances could impact the current period’s financial statements.
2.Review of Previous Audits:
If the entity had a prior auditor, the new auditor should review the work and the conclusions of the previous auditor to ensure proper handling of opening balances.
3.Verification of Opening Balances:
The auditor should verify whether the opening balances are properly carried forward from the previous period’s financial statements, which were audited, and if they comply with the applicable financial reporting framework.
4.Unmodified Opinion on Opening Balances:
If the opening balances are misstated and the misstatement affects the current period's financial statements, the auditor should modify their opinion.
5.Documentation:
The auditor must document the procedures performed and the conclusions reached regarding the opening balances.
This standard helps ensure that the opening balances are accurately reflected in the financial statements, providing reliability and consistency for the audit.