The Council of the Institute has approved this Directive to provide guidance to the practicing members during the
conduct of non-statutory audit of financial statements and other assignments of their clients in the
nature of assurance and related services.
It has been noted in certain instances that the practicing members do not follow the applicable
assurance or related services framework while conducting non-statutory audits and other
professional assignments which are performed for internal purposes and/or on specific request of
their clients. Consequently, members are hereby advised to follow and strictly comply with all the
provisions of the applicable standards and the relevant framework while performing professional
services for their clients which are outside the scope of statutory audits. Furthermore, the terms of
the engagement including the nature of the assignment, its key deliverables and the framework
which will be followed should be documented in the form of an Engagement Letter which is duly
agreed by the client.
In case of an assignment of compilation or preparation of financial statements of the client, the
provisions of the International Standard on Related Services (ISRS) 4410 (relating to Compilation
engagements) have to be followed by the members. In the case of engagement to perform Agreed
upon Procedures, members are required to follow the provisions of ISRS 4400 [Engagements to
Perform Agreed-Upon Procedures regarding Financial Information]. Further, the International
Standards on Assurance Engagement (ISAEs) are to be applied in assurance engagements other than
audits or reviews of historical financial information. The Auditing Technical Release (ATR) 17 also
provides guidance on the application of appropriate auditing standards in carrying out professional
engagement by the auditor.
It is mentioned that non-compliance with the directives of the Council results in professional
misconduct under Clause (3) of Part 4 of Schedule I of the Chartered Accountants Ordinance, 1961.
Therefore, members are advised to take note of the above in order to avoid violation of relevant
