50 Days –

50 Concepts Day-8
SK Sir AUDITING Lectures
Concept-8: ICAI Guidance Notes Vs. Statements
(Applicable to BOTH CA Inter & CA Final)
Learning Objectives:

1. Background Explanation of the Concept

2. Statements Issued by ICAI
3. Guidance Notes Issued by ICAI
4. Difference B/w Statements vs Guidance Notes
5. Examination Questions
6. SK Sir Suggestions

1. Background Explanation :
 Upon Students Qualified as “Chartered Accountants” and wish to start the
Independent Practice, in many situations they may need guidance on how to
perform the audit or they may need clarity in some areas.

 Hence the Institute of Chartered Accountants of India (ICAI) has, from time to
time, issued ‘Guidance Notes’ and ‘Statements’ on a number of matters for the
benefit of members and compliance with laws and regulations.

2. Statements Issued by ICAI

 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 the attest function, it will be the duty of
the members of the Institute:
o To examine whether ‘Statements’ relating to accounting matters
are complied with 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.

o To ensure that the statements relating to auditing matters are followed.

Auditor’s report should draw attention to the material departures

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50 Days –
50 Concepts Day-8
SK Sir AUDITING Lectures

Examples:
A list of statements on Auditing and Accounting
 Statement on payment to auditor for other services
 Statement on Qualification in Auditor’s Report
 Statement on CARO 2020

3. Guidance Notes Issued by ICAI:

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 rely
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

Examples:

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50 Days –
50 Concepts Day-8
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4. Difference b/w Statements and Guidance Notes:

(Mark it as important to the Exam)

Difference Statements’ Guidance Notes’

Statements are the documents Guidance note are the
which are issued with a view to documents which are issued
Meaning and purpose secure compliance by with a view to provide
members on certain matters guidance on matters on which
which appears to be critical the members may repulse
assistance.

Mandatory in nature Recommendatory in nature

Compliance

To ensure that the statements To ensure that guidance note

Duties of members on auditing matters all being on auditing matters are being
followed with while per followed except where it appears
performing the audit that other procedures can be
better applied.

5. Exam Questions
a) “Statements” and “Guidance Notes” of ICAI – Whether Mandatory
or recommendatory? Commence (5M)
b) State whether the given phrase is correct / incorrect
“Statements issued by ICAI are recommendatory”

SK Sir Suggestions
 Students are suggested to understand the basic difference b/w
statements vs guidance notes issued by ICAI.

 Many times ICAI testing this concept in Main exams to check the
knowledge levels of Students but many students filed to attempt the
question correctly as many are not read this or not discussed in the
class room. Suggested to spent 5 min before exams to attempt the
given questions correctly, questions may be MCQ based,
Correct/Incorrect or Theory question.

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50 Days –
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SK Sir AUDITING Lectures

“Don’t Just read auditing subject but to understand

the Subject cleary and to score more marks , students
must write the running notes & practice”

SK Sir Auditing Lectures

CA Inter & CA Final

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