ASA 501 - Existence and Valuation of Inventory - April 2006
Conformity with International Standards Conformity with International Standards on Auditing
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Conformity with International Standards on Auditing
33 Except as noted below, this Auditing Standard conforms with International Standard on Auditing ISA 501 Audit Evidence – Additional Considerations for Specific Items (Part A), Attendance at Physical Inventory Counting, issued by the International Auditing and Assurance Standards Board of the International Federation of Accountants. The main differences between this Auditing Standard and ISA 501 (Part A) are:
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This Auditing Standard contains mandatory requirements for the auditor to obtain audit evidence regarding both the existence and valuation of inventory material to the financial report (paragraph 5). ISA 501 (Part A) only establishes standards and provides guidance in relation to the attendance at a physical inventory counting when inventory is material to the financial statements.
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This Auditing Standard contains mandatory requirements for the auditor to be satisfied with the reasonableness of an entity’s estimation procedures when used by the entity to estimate the physical quantity of inventory that is material (paragraph 19). ISA 501 (Part A) only provides explanatory guidance relating to estimation procedures.
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This Auditing Standard provides explanatory guidance relating to the internal control structure affecting inventory (paragraphs 7-9), whereas ISA 501 (Part A) does not.
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This Auditing Standard provide explanatory guidance relating to prior period inventory (paragraph 16), whereas ISA 501 (Part A) does not.
Compliance with this Auditing Standard enables compliance with ISA 501 (Part A).