A special purpose framework is a financial reporting framework designed to meet the financial information needs of specific users. The financial reporting framework may be a fair presentation framework or a compliance framework. Prior to accepting an engagement under a special purpose framework, it is the auditor’s responsibility to consider the requirements under CAS 210 Agreeing the Terms of Audit Engagements in establishing whether the preconditions for an audit are present.
In particular, paragraph 210.06 requires the auditor to:
- Determine whether the financial reporting framework to be applied in the preparation of the financial statements is acceptable; and
- Obtain the agreement of management that it acknowledges and understands its responsibility:
- For the preparation of the financial statements in accordance with the applicable financial reporting framework, including, where relevant, their fair presentation;
- For such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; and
- To provide the auditor with:
- Access to all information of which management is aware that is relevant to the preparation of the financial statements such as records, documentation and other matters;
- Additional information that the auditor may request from management for the purpose of the audit; and
- Unrestricted access to persons within the entity from whom the auditor determines it necessary to obtain audit evidence.