How to promulgate Auditing and Assurance Standards?

Procedure for Issuing the Statements on Standard Auditing Practices. Broadly, the following procedure is adopted for the formulation of Auditing and Assurance Standards.

(i) The Auditing and Assurance Standards Board (AASB) determines the broad areas in which the Standard on Auditing (SAs) need to be formulated and the priority in regard to the selection therefor.
(ii) In the preparation of SAs, the AASB is assisted by study groups constituted to consider specific subjects. In the formation of study groups, provision is made for participation of a cross-section of members of the Institute.
(iii) On the basis of the work of the study groups, an exposure draft of the proposed SA is prepared by the Board and issued for comments by members of the Institute.
(iv) After taking into consideration the comments received, the draft of the proposed SA is finalised by the AASB and submitted to the Council of the Institute.
(v) The Council of the Institute will consider the final draft of the proposed SA, and if necessary, modify the same in consultation with the AASB. The SA is issued under the authority of the Council.

Compliance with Documents Issued by the Institute

The Institute has, from time to time, issued ‘Guidance Notes’ and ‘Statements’ on a number of matters. The ‘Statements’ have been issued with a view to securing compliance by members on matters which, in the opinion of the Council, are critical for the proper discharge of their functions. ‘Statements’ therefore are mandatory. Accordingly, while discharging their attest function, it will be the duty of the members of the Institute:
(a) to examine whether ‘Statements’ relating to accounting matters are complied with in the presentation of financial statements covered by their audit. In the event of any deviation from the ‘Statements’, it will be their duty to make adequate disclosures in their audit  reports so that the users of financial statements may be aware of such deviations; and

(b) to ensure that the ‘Statements’ relating to auditing matters are followed in the audit of financial information covered by their audit reports. If, for any reason, a member has not been able to perform an audit in accordance with such ‘Statements’, his report should draw attention to the material departures thereform. ‘

Guidance Notes’ are primarily designed to provide guidance to members on matters which may arise in the course of their professional work and on which they may arise in the course of their professional work and on which they may desire assistance in resolving issues which may pose difficulty. Guidance Notes are recommendatory in nature. A member should ordinarily follow recommendations in a guidance note relating to an auditing matter except where he is satisfied that in the circumstances of the case, it may not be necessary to do so. Similarly, while discharging his attest function, a member should examine whether the recommendations in a guidance note relating to an accounting matter have been followed or not. If the same have not been followed, the member should consider whether keeping in view the circumstances of the case, a disclosure in his report is necessary.