A PSA is considered relevant to an audit when?

A Professional Standard or Policy Statement (PSA) is deemed relevant to an audit primarily when it is currently in effect and pertains to the specific circumstances being addressed in the audit. This relevance ensures that the auditor is working with standards that are applicable in the current context, thereby providing guidance that aligns with the existing regulatory framework and the conditions of the audit.

When a PSA is in effect, it indicates that it has not been superseded or rendered obsolete by newer regulations or standards. If the specific circumstances mentioned in the PSA are directly applicable to the audit scenario, the auditor can rely on that guidance to form conclusions about the audit process and findings. This relevance is crucial because it informs the auditor's methodology, decision-making, and the overall assurance that the audit provides.

In contrast, other options may hinge on arbitrary timelines or familiarity rather than the applicability of the standard to the current audit context. A PSA published within the last five years or recently updated does not guarantee its relevance if the circumstances addressed by the PSA do not align with the audit being conducted. Similarly, even if an auditor is familiar with a PSA, without it being in effect and pertinent to the current audit situation, its practical utility may be limited.