HKSA 800 - Special Considerations - Special Purpose Frameworks
Volume III - Comprehensive Study Note
1. Introduction
1.1 Scope of HKSA 800
HKSA 800 (Revised) deals with special considerations in the application of HKSAs (100-700 series) to an audit of financial statements prepared in accordance with a special purpose framework.
Key points:
- This HKSA applies to a complete set of financial statements prepared under a special purpose framework
- HKSA 805 (Revised) covers audits of single financial statements or specific elements, accounts or items
- This HKSA does not override requirements of other HKSAs
- It does not deal with all special considerations that may be relevant
1.2 Effective Date
Effective for audits of financial statements for periods ending on or after 15 December 2016.
1.3 Objective
The auditor's objective when applying HKSAs in an audit of special purpose financial statements is to address appropriately the special considerations relevant to:
| Area | Consideration |
|---|---|
| ------ | --------------- |
| (a) | Acceptance of the engagement |
| (b) | Planning and performance of the engagement |
| (c) | Forming an opinion and reporting on the financial statements |
2. Definitions
2.1 Special Purpose Financial Statements (Para. 6(a))
Definition: Financial statements prepared in accordance with a special purpose framework.
- These are financial statements prepared under a framework other than a general purpose framework
- Includes related disclosures
2.2 Special Purpose Framework (Para. 6(b))
Definition: A financial reporting framework designed to meet the financial information needs of specific users.
The financial reporting framework may be either:
- Fair presentation framework - requires compliance and acknowledges that achieving fair presentation may require disclosures beyond those required
- Compliance framework - requires compliance but does not contain the above acknowledgement
2.3 Examples of Special Purpose Frameworks (Para. A1)
| Example | Description |
|---|---|
| --------- | ------------- |
| Tax basis of accounting | For financial statements accompanying an entity's tax return |
| Cash receipts and disbursements basis | For cash flow information requested by creditors |
| Regulatory provisions | Financial reporting provisions established by a regulator |
| Contract provisions | Bond indentures, loan agreements, project grants |
2.4 Incomplete Compliance with Established Frameworks (Para. A2-A3)
Critical Rule: When a special purpose framework is based on an established framework (e.g., HKFRS) but does not comply with all requirements, it is inappropriate to imply full compliance.
Example: A contract requires financial statements prepared in accordance with "most, but not all" of HKFRS. The description should refer to the financial reporting provisions of the contract, not HKFRS.
Important: Such a special purpose framework may not be a fair presentation framework even if the underlying framework is a fair presentation framework.
2.5 Sole Financial Statements (Para. A4)
When special purpose financial statements are the only financial statements an entity prepares, they may be used by users other than those intended. Despite broad distribution, they remain special purpose financial statements for HKSA purposes.
3. Requirements - Considerations When Accepting the Engagement
3.1 Acceptability of the Financial Reporting Framework (Para. 8)
The auditor shall obtain an understanding of:
| Requirement | Details |
|---|---|
| ------------- | --------- |
| (a) | The purpose for which the financial statements are prepared |
| (b) | The intended users |
| (c) | The steps taken by management to determine that the applicable financial reporting framework is acceptable |
3.2 Key Factors in Determining Acceptability (Para. A5-A8)
Primary factor: The financial information needs of the intended users.
Presumptions of acceptability:
- Standards established by an authorized/recognized organization following an established and transparent process → presumed acceptable
- Law or regulation prescribing the framework for a certain type of entity → presumed acceptable (absent indications to the contrary)
When framework is from a contract or other sources:
- Determine acceptability by considering whether the framework exhibits attributes normally exhibited by acceptable financial reporting frameworks (as described in Appendix 2 of HKSA 210)
- The relative importance of each attribute is a matter of professional judgment
Example from Para. A8:
For establishing net asset value at sale date, vendor and purchaser may agree on very prudent estimates for uncollectible accounts receivable, even though such information is not neutral compared with general purpose framework information.
4. Requirements - Considerations When Planning and Performing the Audit
4.1 Special Consideration in Applying HKSAs (Para. 9)
The auditor shall determine whether application of the HKSAs requires special consideration in the circumstances of the engagement.
Key areas requiring special consideration:
| Area | Special Consideration |
|---|---|
| ------ | ---------------------- |
| Materiality (HKSA 320) | Judgments based on financial information needs of intended users, not users as a group |
| Materiality thresholds agreed with users | Such thresholds do not relieve auditor from determining materiality per HKSA 320 |
| Communication with those charged with governance (HKSA 260) | Those responsible for oversight of special purpose financial statements may differ from those for general purpose financial statements |
4.2 Understanding of the Applicable Financial Reporting Framework (Para. 10)
Requirement: The auditor shall obtain an understanding of:
- The applicable financial reporting framework
- The entity's accounting policies and reasons for any changes
Special requirement for contract-based frameworks:
The auditor shall obtain an understanding of any significant interpretations of the contract that management made in the preparation of those financial statements.
Definition of significant interpretation:
An interpretation is significant when adoption of another reasonable interpretation would have produced a material difference in the information presented in the financial statements.
5. Requirements - Forming an Opinion and Reporting Considerations
5.1 Application of HKSA 700 (Revised) (Para. 11)
When forming an opinion and reporting on special purpose financial statements, the auditor shall apply the requirements in HKSA 700 (Revised).
5.2 Description of the Applicable Financial Reporting Framework (Para. 12-13)
Para. 12 - Evaluation of description:
- The auditor shall evaluate whether the financial statements adequately refer to or describe the applicable financial reporting framework
- For contract-based frameworks: evaluate whether the financial statements adequately describe any significant interpretations of the contract
Para. 13 - Specific reporting elements:
| Element | Requirement |
|---|---|
| --------- | ------------- |
| (a) | Describe the purpose for which the financial statements are prepared and, if necessary, the intended users (or refer to a note containing that information) |
| (b) | If management has a choice of frameworks, the explanation of management's responsibility shall also reference its responsibility for determining that the framework is acceptable |
5.3 Alerting Readers - Emphasis of Matter Paragraph (Para. 14)
Mandatory requirement: The auditor's report on special purpose financial statements shall include an Emphasis of Matter paragraph alerting users that:
1. The financial statements are prepared in accordance with a special purpose framework
2. As a result, the financial statements may not be suitable for another purpose
5.4 Restriction on Distribution or Use (Para. A21)
The auditor may consider it appropriate to indicate that the auditor's report is intended solely for specific users. This may be achieved by restricting distribution or use of the auditor's report.
6. Application and Other Explanatory Material - Detailed Analysis
6.1 Going Concern Considerations (Para. A15)
Key point: Special purpose financial statements may or may not be prepared under a framework where the going concern basis is relevant.
Examples:
- Tax basis financial statements in some jurisdictions → going concern basis may not be relevant
- The description of management's responsibilities and auditor's responsibilities relating to going concern may need to be adapted
6.2 Key Audit Matters (Para. A16)
| Scenario | Application of HKSA 701 |
|---|---|
| ---------- | ------------------------ |
| Listed entities - general purpose financial statements | Required to communicate KAMs |
| Special purpose financial statements | HKSA 701 applies only when: (a) required by law or regulation, OR (b) the auditor otherwise decides to communicate KAMs |
| When KAMs are communicated | HKSA 701 applies in its entirety |
6.3 Other Information (Para. A17)
Definition for HKSA 800 purposes:
Reports containing or accompanying special purpose financial statements—the purpose of which is to provide owners (or similar stakeholders) with information on matters presented in the special purpose financial statements—are considered to be annual reports for HKSA 720 (Revised).
"Similar stakeholders" includes the specific users whose financial information needs are met by the design of the special purpose framework.
6.4 Name of the Engagement Partner (Para. A18)
- Listed entities: Required to include the name of the engagement partner
- Other entities: May be required by law/regulation or the auditor may otherwise decide to do so
6.5 Reference to General Purpose Financial Statements (Para. A19)
The auditor may deem it appropriate to refer, in an Other Matter paragraph, to:
- The auditor's report on the complete set of general purpose financial statements
- Matter(s) reported therein
Example: Refer to a Material Uncertainty Related to Going Concern section in the general purpose auditor's report.
7. Illustrations of Auditor's Reports (Appendix)
7.1 Illustration 1 - Contract-Based Compliance Framework (Non-Listed Entity)
Key features:
- Financial statements prepared per financial reporting provisions of a contract
- Compliance framework
- No general purpose financial statements issued
- Unmodified opinion
- Distribution and use restricted
- No KAMs communicated
Report structure:
- Opinion paragraph
- Basis for Opinion
- Emphasis of Matter - Basis of Accounting and Restriction on Distribution and Use
- Responsibilities of Management and Those Charged with Governance
- Auditor's Responsibilities for the Audit of the Financial Statements
7.2 Illustration 2 - Tax Basis Compliance Framework (Non-Listed Entity)
Key features:
- Partnership financial statements prepared per tax basis of accounting
- Compliance framework
- To assist partners in preparing individual income tax returns
- Unmodified opinion
- Distribution restricted
- No KAMs communicated
Report structure:
- Opinion paragraph
- Basis for Opinion
- Emphasis of Matter - Basis of Accounting and Restriction on Distribution
- Responsibilities of Management and Those Charged with Governance
- Auditor's Responsibilities for the Audit of the Financial Statements
7.3 Illustration 3 - Regulatory Fair Presentation Framework (Listed Entity)
Key features:
- Listed entity
- Financial statements prepared per financial reporting provisions established by a regulator
- Fair presentation framework
- Unmodified opinion
- Material Uncertainty Related to Going Concern exists (adequate disclosure)
- Distribution not restricted
- KAMs communicated (required by regulator)
- Other Matter paragraph referencing general purpose financial statements
Report structure:
- Opinion paragraph
- Basis for Opinion
- Emphasis of Matter - Basis of Accounting
- Material Uncertainty Related to Going Concern
- Key Audit Matters
- Other Matter
- Responsibilities of Management and Those Charged with Governance
- Auditor's Responsibilities for the Audit of the Financial Statements
8. Key Takeaways Summary Table
| Topic | Key Requirement |
|---|---|
| ------- | ----------------- |
| Definition | Special purpose framework = designed for specific users' needs |
| Acceptance | Understand purpose, intended users, and management's steps to determine framework acceptability |
| Planning | Apply HKSAs with special consideration; materiality based on intended users |
| Contract frameworks | Obtain understanding of significant interpretations of the contract |
| Reporting | Apply HKSA 700 (Revised) |
| Description of framework | Evaluate adequacy; for contracts, evaluate description of significant interpretations |
| Emphasis of Matter | Mandatory - alert users that financial statements may not be suitable for another purpose |
| Restriction | May restrict distribution/use to specific users |
| KAMs | Only when required by law/regulation or auditor decides to communicate |
| Going concern | May need adaptation depending on framework |
| Other information | Reports accompanying special purpose financial statements = annual reports for HKSA 720 |
# ---
# 繁體中文部分
香港審計準則第800號（修訂）— 特殊考慮事項 — 按照特殊目的框架編製的財務報表的審計
1. 引言
1.1 範圍
HKSA 800（修訂）處理在應用香港審計準則（100-700系列）審計按照特殊目的框架編製的財務報表時的特殊考慮事項。
要點：
- 本準則適用於按照特殊目的框架編製的整套財務報表
- HKSA 805（修訂）涵蓋對單一財務報表或特定要素、賬戶或項目的審計
- 本準則不凌駕其他香港審計準則的要求
- 本準則不處理所有可能相關的特殊考慮事項
1.2 生效日期
適用於2016年12月15日或之後結束期間的財務報表審計。
1.3 目標
核數師在應用香港審計準則審計按照特殊目的框架編製的財務報表時，目標是適當處理以下方面的特殊考慮事項：
| 方面 | 考慮事項 |
|---|---|
| ------ | ---------- |
| (a) | 接受業務約定 |
| (b) | 計劃和執行該業務 |
| (c) | 形成意見並對財務報表出具報告 |
2. 定義
2.1 特殊目的財務報表（第6(a)段）
定義： 按照特殊目的框架編製的財務報表。
- 這些是按照一般目的框架以外的框架編製的財務報表
- 包括相關披露
2.2 特殊目的框架（第6(b)段）
定義： 旨在滿足特定使用者財務信息需求的財務報告框架。
財務報告框架可以是：
- 公允列報框架 — 要求遵守並承認實現公允列報可能需要超出規定要求的披露
- 合規框架 — 要求遵守但不包含上述承認
2.3 特殊目的框架示例（第A1段）
| 示例 | 描述 |
|---|---|
| ------ | ------ |
| 稅務基礎會計 | 用於伴隨實體納稅申報表的財務報表 |
| 現金收付制 | 應債權人要求提供的現金流量信息 |
| 監管規定 | 監管機構制定的財務報告規定 |
| 合同規定 | 債券契約、貸款協議、項目資助 |
2.4 對既定框架的不完全遵守（第A2-A3段）
關鍵規則： 當特殊目的框架基於既定框架（如香港財務報告準則）但不完全遵守所有要求時，不適當暗示完全遵守。
示例： 合同要求按照「大部分但非全部」香港財務報告準則編製財務報表。描述應參照合同的財務報告規定，而非香港財務報告準則。
重要提示： 即使基礎框架是公允列報框架，此類特殊目的框架可能不是公允列報框架。
2.5 唯一財務報表（第A4段）
當特殊目的財務報表是實體編製的唯一財務報表時，可能被預期使用者以外的使用者使用。儘管廣泛分發，就香港審計準則而言，它們仍然是特殊目的財務報表。
3. 要求 — 接受業務約定時的考慮事項
3.1 財務報告框架的可接受性（第8段）
核數師應了解：
| 要求 | 詳情 |
|---|---|
| ------ | ------ |
| (a) | 編製財務報表的目的 |
| (b) | 預期使用者 |
| (c) | 管理層為確定適用的財務報告框架在該情況下可接受而採取的步驟 |
3.2 確定可接受性的關鍵因素（第A5-A8段）
主要因素： 預期使用者的財務信息需求。
可接受性的推定：
- 由授權/認可組織遵循既定透明程序制定的準則 → 推定可接受
- 法律或法規為特定類型實體規定的框架 → 推定可接受（無相反跡象）
當框架來自合同或其他來源時：
- 通過考慮框架是否展現可接受財務報告框架通常具備的屬性來確定可接受性（如HKSA 210附錄2所述）
- 每個屬性的相對重要性是專業判斷事項
第A8段示例：
為確定出售日淨資產價值，賣方和買方可能同意對應收賬款壞賬準備採用非常審慎的估計，即使與按照一般目的框架編製的財務信息相比，此類財務信息不中立。
4. 要求 — 計劃和執行審計時的考慮事項
4.1 應用香港審計準則的特殊考慮（第9段）
核數師應確定在業務約定情況下應用香港審計準則是否需要特殊考慮。
需要特殊考慮的關鍵領域：
| 領域 | 特殊考慮 |
|---|---|
| ------ | ---------- |
| 重要性（HKSA 320） | 判斷基於預期使用者的財務信息需求，而非使用者整體 |
| 與使用者商定的重要性門檻 | 此類門檻不免除核數師根據HKSA 320確定重要性 |
| 與治理層溝通（HKSA 260） | 負責監督特殊目的財務報表的人員可能與一般目的財務報表的人員不同 |
4.2 了解適用的財務報告框架（第10段）
要求： 核數師應了解：
- 適用的財務報告框架
- 實體的會計政策及任何變更的原因
基於合同的框架的特殊要求：
核數師應了解管理層在編製該等財務報表時對合同作出的任何重大解釋。
重大解釋的定義：
當採納另一合理解釋會對財務報表所呈列的信息產生重大差異時，該解釋即為重大。
5. 要求 — 形成意見和報告考慮事項
5.1 應用HKSA 700（修訂）（第11段）
在對特殊目的財務報表形成意見和出具報告時，核數師應應用HKSA 700（修訂）的要求。
5.2 適用財務報告框架的描述（第12-13段）
第12段 — 對描述的評價：
- 核數師應評價財務報表是否充分提及或描述適用的財務報告框架
- 對於基於合同的框架：評價財務報表是否充分描述對合同的任何重大解釋
第13段 — 具體報告要素：
| 要素 | 要求 |
|---|---|
| ------ | ------ |
| (a) | 描述編製財務報表的目的，必要時描述預期使用者（或參照包含該信息的附註） |
| (b) | 如果管理層有框架選擇權，管理層責任的說明也應參照其確定框架在該情況下可接受的責任 |
5.3 提醒使用者 — 強調事項段落（第14段）
強制要求： 特殊目的財務報表的核數師報告應包括強調事項段落，提醒使用者：
1. 財務報表是按照特殊目的框架編製的
2. 因此，財務報表可能不適用於其他目的
5.4 分發或使用的限制（第A21段）
核數師可考慮表明核數師報告僅供特定使用者使用。這可通過限制核數師報告的分發或使用來實現。
6. 應用及其他解釋性材料 — 詳細分析
6.1 持續經營考慮（第A15段）
要點： 特殊目的財務報表可能按照持續經營基礎相關或不相關的框架編製。
示例：
- 某些司法管轄區的稅務基礎財務報表 → 持續經營基礎可能不相關
- 管理層責任和核數師責任中關於持續經營的描述可能需要調整
6.2 關鍵審計事項（第A16段）
| 情況 | HKSA 701的應用 |
|---|---|
| ------ | ---------------- |
| 上市實體 — 一般目的財務報表 | 要求溝通關鍵審計事項 |
| 特殊目的財務報表 | HKSA 701僅在以下情況適用：(a)法律或法規要求，或(b)核數師另行決定溝通關鍵審計事項 |
| 當溝通關鍵審計事項時 | HKSA 701完整適用 |
6.3 其他信息（第A17段）
HKSA 800目的的定義：
包含或隨附特殊目的財務報表的報告——其目的是向所有者（或類似利益相關者）提供特殊目的財務報表中呈列事項的信息——被視為HKSA 720（修訂）目的的年度報告。
「類似利益相關者」 包括其財務信息需求由用於編製特殊目的財務報表的特殊目的框架設計所滿足的特定使用者。
6.4 項目合夥人姓名（第A18段）
- 上市實體： 要求包括項目合夥人姓名
- 其他實體： 可能由法律/法規要求，或核數師另行決定這樣做
6.5 參照一般目的財務報表（第A19段）
核數師可認為在其他事項段落中參照以下內容是適當的：
- 對整套一般目的財務報表出具的核數師報告
- 其中報告的事項
示例： 參照一般目的核數師報告中的「與持續經營相關的重大不確定性」部分。
7. 核數師報告示例（附錄）
7.1 示例1 — 基於合同的合規框架（非上市實體）
主要特點：
- 財務報表按照合同財務報告規定編製
- 合規框架
- 未出具一般目的財務報表
- 無保留意見
- 分發和使用受限
- 未溝通關鍵審計事項
報告結構：
- 意見段
- 意見基礎
- 強調事項 — 會計基礎及分發和使用限制
- 管理層及治理層的責任
- 核數師審計財務報表的責任
7.2 示例2 — 稅務基礎合規框架（非上市實體）
主要特點：
- 合夥企業財務報表按照稅務基礎會計編製
- 合規框架
- 協助合夥人編製個人所得稅申報表
- 無保留意見
- 分發受限
- 未溝通關鍵審計事項
報告結構：
- 意見段
- 意見基礎
- 強調事項 — 會計基礎及分發限制
- 管理層及治理層的責任
- 核數師審計財務報表的責任
7.3 示例3 — 監管公允列報框架（上市實體）
主要特點：
- 上市實體
- 財務報表按照監管機構制定的財務報告規定編製
- 公允列報框架
- 無保留意見
- 存在與持續經營相關的重大不確定性（披露充分）
- 分發不受限
- 溝通關鍵審計事項（監管機構要求）
- 參照一般目的財務報表的其他事項段落
報告結構：
- 意見段
- 意見基礎
- 強調事項 — 會計基礎
- 與持續經營相關的重大不確定性
- 關鍵審計事項
- 其他事項
- 管理層及治理層的責任
- 核數師審計財務報表的責任
8. 關鍵要點總結表
| 主題 | 關鍵要求 |
|---|---|
| ------ | ---------- |
| 定義 | 特殊目的框架 = 為特定使用者需求設計 |
| 接受業務 | 了解目的、預期使用者及管理層確定框架可接受性的步驟 |
| 計劃 | 應用香港審計準則時考慮特殊情況；基於預期使用者確定重要性 |
| 合同框架 | 了解對合同的重大解釋 |
| 報告 | 應用HKSA 700（修訂） |
| 框架描述 | 評價充分性；對於合同，評價重大解釋的描述 |
| 強調事項 | 強制 — 提醒使用者財務報表可能不適用於其他目的 |
| 限制 | 可限制分發/使用於特定使用者 |
| 關鍵審計事項 | 僅在法律/法規要求或核數師決定溝通時 |
| 持續經營 | 可能需要根據框架調整 |
| 其他信息 | 隨附特殊目的財務報表的報告 = HKSA 720目的的年度報告 |
# 50 Multiple Choice Questions (MCQs)
Q1. According to HKSA 800, what is a "special purpose framework"?
A. A financial reporting framework designed to meet the financial information needs of the general public
B. A financial reporting framework designed to meet the financial information needs of specific users
C. A financial reporting framework that complies with all HKFRS requirements
D. A financial reporting framework established only by law or regulation
Answer: B
Q2. Which of the following is NOT an example of a special purpose framework mentioned in HKSA 800?
A. Tax basis of accounting
B. Cash receipts and disbursements basis of accounting
C. HKFRS as issued by the HKICPA
D. Financial reporting provisions of a contract
Answer: C
Q3. When is HKSA 800 effective?
A. For audits of financial statements for periods beginning on or after 15 December 2016
B. For audits of financial statements for periods ending on or after 15 December 2016
C. For audits of financial statements for periods ending on or after 15 December 2017
D. For audits of financial statements for periods beginning on or after 15 December 2017
Answer: B
Q4. What are the three areas of special considerations that HKSA 800 addresses?
A. Planning, execution, and review
B. Acceptance, planning and performance, and forming an opinion and reporting
C. Risk assessment, internal control, and substantive procedures
D. Materiality, audit evidence, and documentation
Answer: B
Q5. According to HKSA 800, special purpose financial statements are:
A. Financial statements prepared in accordance with a general purpose framework
B. Financial statements prepared in accordance with a special purpose framework
C. Financial statements that include only the balance sheet
D. Financial statements prepared for regulatory purposes only
Answer: B
Q6. When accepting an engagement to audit special purpose financial statements, the auditor shall obtain an understanding of all of the following EXCEPT:
A. The purpose for which the financial statements are prepared
B. The intended users
C. The steps taken by management to determine that the applicable financial reporting framework is acceptable
D. The audit fee arrangement
Answer: D
Q7. In the case of financial statements prepared in accordance with the provisions of a contract, the auditor shall obtain an understanding of:
A. The entire contract in detail
B. Any significant interpretations of the contract that management made
C. The legal enforceability of the contract
D. The financial position of the other party to the contract
Answer: B
Q8. An interpretation of a contract is considered "significant" when:
A. It involves a large monetary amount
B. Adoption of another reasonable interpretation would have produced a material difference in the information presented in the financial statements
C. Management considers it important
D. The auditor disagrees with the interpretation
Answer: B
Q9. When forming an opinion and reporting on special purpose financial statements, the auditor shall apply the requirements in:
A. HKSA 200
B. HKSA 700 (Revised)
C. HKSA 705 (Revised)
D. HKSA 706 (Revised)
Answer: B
Q10. The auditor's report on special purpose financial statements shall include an Emphasis of Matter paragraph that:
A. Describes the audit procedures performed
B. Alerts users that the financial statements are prepared in accordance with a special purpose framework and may not be suitable for another purpose
C. Explains the auditor's qualifications
D. Describes the entity's business operations
Answer: B
Q11. If management has a choice of financial reporting frameworks in the preparation of special purpose financial statements, the explanation of management's responsibility shall:
A. State that management chose the most appropriate framework
B. Make reference to management's responsibility for determining that the applicable financial reporting framework is acceptable in the circumstances
C. Explain why other frameworks were not chosen
D. Describe the advantages of the chosen framework
Answer: B
Q12. According to HKSA 800, when a special purpose framework is based on an established framework but does not comply with all requirements, it is:
A. Always acceptable if the deviations are disclosed
B. Inappropriate to imply full compliance with the established framework
C. Required to obtain a waiver from the standards setter
D. Considered a general purpose framework
Answer: B
Q13. In determining materiality for an audit of special purpose financial statements, judgments are based on:
A. The common financial information needs of users as a group
B. The financial information needs of the intended users
C. The auditor's professional judgment without reference to users
D. The materiality thresholds used in the prior year
Answer: B
Q14. If management agrees with intended users on a threshold below which misstatements will not be corrected, this:
A. Relieves the auditor from determining materiality in accordance with HKSA 320
B. Does not relieve the auditor from the requirement to determine materiality in accordance with HKSA 320
C. Automatically becomes the materiality threshold for the audit
D. Must be disclosed in the auditor's report
Answer: B
Q15. For audits of special purpose financial statements, HKSA 701 on Key Audit Matters applies:
A. In all cases
B. Only when the entity is listed
C. Only when required by law or regulation or the auditor otherwise decides to communicate key audit matters
D. Never
Answer: C
Q16. When key audit matters are communicated in the auditor's report on special purpose financial statements:
A. Only selected requirements of HKSA 701 apply
B. HKSA 701 applies in its entirety
C. The auditor may choose which requirements to apply
D. HKSA 701 does not apply
Answer: B
Q17. According to HKSA 800, reports containing or accompanying special purpose financial statements that provide information to owners or similar stakeholders are considered:
A. Supplementary reports
B. Annual reports for the purpose of HKSA 720 (Revised)
C. Management reports
D. Regulatory filings
Answer: B
Q18. The requirement to include the name of the engagement partner in the auditor's report applies to audits of special purpose financial statements of:
A. All entities
B. Listed entities only
C. Entities where the auditor decides to include it
D. Listed entities, and may be required by law/regulation or decided by the auditor for other entities
Answer: D
Q19. When special purpose financial statements are the only financial statements an entity prepares and are broadly distributed, they are:
A. Considered general purpose financial statements
B. Still considered special purpose financial statements for HKSA purposes
C. Required to comply with HKFRS
D. Not subject to HKSA 800
Answer: B
Q20. In the case of special purpose financial statements prepared in accordance with a compliance framework, the auditor's opinion should state that the financial statements:
A. Present fairly, in all material respects
B. Are prepared, in all material respects, in accordance with the applicable framework
C. Give a true and fair view
D. Are accurate and complete
Answer: B
Q21. Which of the following is a fair presentation framework?
A. Tax basis of accounting
B. Cash receipts and disbursements basis
C. Financial reporting provisions of a contract that is a compliance framework
D. A framework that requires compliance and acknowledges that achieving fair presentation may require disclosures beyond those required
Answer: D
Q22. According to HKSA 800, the auditor may consider it appropriate to restrict:
A. Access to the entity's books and records
B. The distribution or use of the auditor's report
C. The number of audit procedures performed
D. Communication with those charged with governance
Answer: B
Q23. In Illustration 1 of the Appendix, the auditor's report includes an Emphasis of Matter paragraph that covers:
A. Basis of Accounting and Restriction on Distribution and Use
B. Going Concern
C. Key Audit Matters
D. Other Information
Answer: A
Q24. In Illustration 2 of the Appendix, the special purpose financial statements are prepared to:
A. Comply with regulatory requirements
B. Assist the partners in preparing their individual income tax returns
C. Meet the requirements of a loan agreement
D. Provide information to creditors
Answer: B
Q25. In Illustration 3 of the Appendix, the auditor's report includes a section on:
A. Restriction on Distribution
B. Material Uncertainty Related to Going Concern
C. Emphasis of Matter - Restriction on Use
D. Other Matter - Restriction on Distribution
Answer: B
Q26. According to HKSA 800, the auditor shall evaluate whether the financial statements adequately describe any significant interpretations of the contract when the financial statements are prepared in accordance with:
A. A tax basis of accounting
B. The provisions of a contract
C. A regulatory framework
D. Cash receipts and disbursements basis
Answer: B
Q27. The objective of HKSA 800 is to address special considerations relevant to:
A. Only the planning and performance of the audit
B. Only the acceptance of the engagement
C. Only forming an opinion and reporting
D. Acceptance, planning and performance, and forming an opinion and reporting
Answer: D
Q28. When a special purpose framework is based on a fair presentation framework but does not comply with all its requirements, the special purpose framework:
A. Is automatically a fair presentation framework
B. May not be a fair presentation framework
C. Must be treated as a compliance framework
D. Cannot be used for any purpose
Answer: B
Q29. In determining the acceptability of a financial reporting framework that encompasses the financial reporting provisions of a contract, the auditor considers:
A. Only the requirements of HKSA 210
B. Whether the framework exhibits attributes normally exhibited by acceptable financial reporting frameworks
C. The opinion of legal counsel
D. The industry practice
Answer: B
Q30. According to HKSA 800, the auditor's report on special purpose financial statements shall describe:
A. The audit methodology used
B. The purpose for which the financial statements are prepared and, if necessary, the intended users
C. The qualifications of the audit team
D. The fee arrangement for the audit
Answer: B
Q31. In the context of HKSA 800, "special purpose financial statements" includes:
A. Only the primary financial statements
B. Only the notes to the financial statements
C. The related disclosures
D. Only the balance sheet and income statement
Answer: C
Q32. When a regulator establishes financial reporting provisions for a certain type of entity, such framework is:
A. Always unacceptable for audit purposes
B. Presumed acceptable for special purpose financial statements absent indications to the contrary
C. Required to be supplemented by HKFRS
D. Considered a general purpose framework
Answer: B
Q33. According to HKSA 800, those responsible for oversight of the preparation of special purpose financial statements:
A. Must always be the same as those for general purpose financial statements
B. May not be the same as those for general purpose financial statements
C. Must be disclosed in the auditor's report
D. Must be independent of management
Answer: B
Q34. In the auditor's report on special purpose financial statements, the Emphasis of Matter paragraph required by paragraph 14:
A. Is optional
B. Is mandatory
C. May be included in the Basis for Opinion section
D. Is only required for listed entities
Answer: B
Q35. According to HKSA 800, the auditor may refer in an Other Matter paragraph to:
A. The auditor's report on the complete set of general purpose financial statements
B. The entity's internal control weaknesses
C. The auditor's fee
D. The entity's future plans
Answer: A
Q36. For special purpose financial statements prepared on a tax basis in some jurisdictions, the going concern basis of accounting:
A. Is always relevant
B. May not be relevant
C. Must be applied regardless
D. Is replaced by the liquidation basis
Answer: B
Q37. According to HKSA 800, when a special purpose framework is based on standards established by an authorized organization following a transparent process, the framework is:
A. Always acceptable
B. Presumed acceptable
C. Never acceptable
D. Subject to additional review
Answer: B
Q38. In Illustration 1 of the Appendix, the auditor's report is intended for:
A. The general public
B. The Company and DEF Company only
C. All stakeholders
D. Regulatory authorities only
Answer: B
Q39. According to HKSA 800, the auditor shall determine whether application of the HKSAs requires special consideration:
A. Only at the planning stage
B. At the acceptance stage only
C. In planning and performing the audit
D. Only at the reporting stage
Answer: C
Q40. The description of the applicable financial reporting framework in special purpose financial statements prepared in accordance with a contract should refer to:
A. The financial reporting standards of the jurisdiction
B. The financial reporting provisions of the contract
C. Both the contract and the standards
D. The general purpose framework
Answer: B
Q41. According to HKSA 800, the auditor's responsibilities relating to going concern may need to be adapted depending on:
A. The size of the entity
B. The applicable financial reporting framework used
C. The auditor's experience
D. The industry in which the entity operates
Answer: B
Q42. In the context of HKSA 800, "similar stakeholders" in relation to other information includes:
A. All potential investors
B. The specific users whose financial information needs are met by the design of the special purpose framework
C. Regulatory authorities
D. The general public
Answer: B
Q43. According to HKSA 800, the auditor may consider it appropriate to restrict distribution or use of the auditor's report when:
A. The entity is not listed
B. The auditor's report is intended solely for specific users
C. The financial statements contain errors
D. The audit is not completed
Answer: B
Q44. In Illustration 3 of the Appendix, the auditor's report includes an Other Matter paragraph that:
A. Restricts distribution of the report
B. Refers to the auditor's report on the general purpose financial statements
C. Describes the audit methodology
D. Explains the basis of accounting
Answer: B
Q45. According to HKSA 800, when a special purpose framework is a compliance framework, the auditor's opinion should be expressed in terms of:
A. True and fair view
B. Fair presentation
C. Prepared, in all material respects, in accordance with the framework
D. Compliance with all applicable laws
Answer: C
Q46. The requirement in HKSA 800 for the auditor to obtain an understanding of significant interpretations of a contract applies when:
A. The contract is complex
B. The financial statements are prepared in accordance with the provisions of a contract
C. The contract involves related parties
D. The contract is with a government entity
Answer: B
Q47. According to HKSA 800, the auditor's report on special purpose financial statements of a listed entity:
A. Must always include key audit matters
B. Must include key audit matters only if required by law/regulation or the auditor decides to communicate them
C. Cannot include key audit matters
D. Must include key audit matters only for general purpose financial statements
Answer: B
Q48. In determining the acceptability of a financial reporting framework for special purpose financial statements, the key factor is:
A. The auditor's preference
B. The financial information needs of the intended users
C. The cost of implementation
D. The complexity of the framework
Answer: B
Q49. According to HKSA 800, the Emphasis of Matter paragraph alerting users that the financial statements may not be suitable for another purpose:
A. May be included in the Basis for Opinion section
B. Must be included within a separate section with an appropriate heading that includes the term "Emphasis of Matter"
C. Is optional for non-listed entities
D. Must be included only when distribution is restricted
Answer: B
Q50. When an entity prepares both general purpose and special purpose financial statements, the auditor may refer in the special purpose auditor's report to:
A. The audit procedures performed on the general purpose financial statements
B. The auditor's report on the general purpose financial statements
C. The differences between the two sets of financial statements
D. The management's choice of frameworks
Answer: B
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50 MCQs covering all sections. Timed at 1.25 min each (62.5 min total).
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