AAS 22 INITIAL ENGAGEMENTS-OPENING BALANCES DUCTION purpose of this auditing and assurance standard to establish standards regarding audit

of opening ces incase of initial engagements,i.e,when the cial statement are audited for the first time or when nancial statement for the preceeding period were d by another auditor.this statement would also be dered by the auditor so that he may become aware ntingencies and commitments existing at the ning of the current period ening balancesmeans those account balances exist in the beginning of the period.opening ces are the closing balances of the preceeding d brought forward to the current period and reflect fect of: sactions and other events of the preceeding ds;and ounting policies applied in the preceeding period

nitial audit engagements,the auditor should obtain ient appropriate audit evidence that: closing balances of the preceeding period have correctly brought forward to the current period; opening balances do not contain misstatements materially affect the financial statements for the nt period,and; ropriate accounting policies are consistently d he initial audit engagement,the auditor will not previously obtained audit evidence supporting the ng balances

ROCEDURES he purpose of this statement,the sufficiency and appropriateness of the vidence,the auditor will not get to obtain regarding opening es,would depend pn the following matter:

a.the accounting policies followed by the entity b.whether the auditors report contained an unqualified opinion,a qualified opinion,adverse opinion or disclaimer of opinion where the

financial statements for the preceeding period were audited b.the nature of the opening balances,including the risk of the misstatements in the financial statements for the current period. d.the materiality of the opening balances relative to the financial statements for the current period. 6.the auditor will need to consider whether the accounting policies followed in the preceeding period,as per which the opening balances have been arrived at,were appropriate and that those policies are consistently applies in the financial statements for the current period and were sach accounting policies are inappropriate,the same have been changed in the current period 7.when the financial statements of the preceeding period were audited bt another auditor the current auditor may be able to obtain the sufficient appropriate audit evidence regarding opening balances by perusing the copies of the

audited statements.ordinarily.the current auditor can place reliance on the current closing balances contained in the financial statements for the preceeding period,except when during the performance of audit procedures for the current period the possibility of misstatements in opening balances is indicated 8.when the financial statements for the preceeding period were not audited by using the procedures prescribed in paragraph 7,the auditor will need to perform other procedures discussed in paragraphs 9 and 10 9.for current asset and liabilities,some audit evidence can ordinarily be obtained as part of the audit procedures performed during the current perioddfor e.g.the collection of opening accounts receivable during the current period will provide some audit evidence as to their existence 10.for other assets and liabilities such as fixes assets investments and long term debt,the auditor

wil examine the records underlying the opening balances.in certain cases the auditor may be able of obtaining confirmation of opening balances from third parties,e.g. for long term inviestments AUDIT CONCLUSION AND REPORTING 11.If,after performing procedures including those set out above,the auditor is unable to obtain sufficient appropriate audit evidence concerning opening balances the auditor should express; a)a qualified opinion b)a disclaimer of opinion the auditor ms\ay also express an opinion which is qualified or disclaiming regarding the profit or loss and unqualified regarding state of affairs 12.if the opening balances contains misstatements which materially affect the financial statements for the current year and is not properly accounted for and adequately disclose,the auditor should express a qualified opinion or an adverse opinion,as appropriate.

Effective date: 13.this is auditing and assurance standard becomes operative for all audits commencing on or after 1st july,2001. Bibliography: 1)auditing and assurance standard IPCC ICAI
2)GOOGLE.COM