Page 162 - CA Final PARAM Digital Book.

Answer 1. SA 700: Reference to SA 700, its full name & its applicable in the given scenario.
2. Concept: Auditor’s Responsibilities for the Audit of the Financial Statements
Communication:
Shortcut: KIA
1. Key Audit Matters:
For audits under SA 701:
- Determined key audit matters from those communicated with governance.
- These are matters most significant to the current period's financial statement audit.
- Describe these matters in the auditor's report, unless:
- Law or regulation prevents public disclosure.
- Extremely rare circumstances dictate that disclosure may not be in the public interest.

2. Ethics & Independence:
- Provide governance a statement that:
- Auditor complied with relevant ethical requirements regarding independence.
- All relationships and potential conflicts affecting auditor’s independence are communicated.
- Relevant safeguards are applied where necessary.

3. Audit plan & findings:
- Communicate with governance about:
- Planned audit scope and timing.
- Significant audit findings.
- Significant deficiencies in internal control identified during the audit.

3. Case Discussion: Discuss case.
4. Conclusion: Such communication assists those charged with governance in fulfilling their responsibility
to oversee the financial reporting process and in fulfilling their oversight responsibilities.

Other Standards on Auditing in addition to Standard Old Course – (N19R, SM21)
QNO on Auditing issued by the ICAI New Course – (SM23)
111.050
TITANIUM CNO— SA700.380
KPI Ltd is a joint venture of KPI Inc, a company based in US, and OPQ Ltd, a company based in Japan
(hereinafter referred to as ‘JV partners’). KPI Ltd was registered in India and is operating as a marketing
support company for KPI Inc. All the costs of KPI Ltd are incurred in India and entire revenue of KPI Inc is
generated in USD. The entire funding requirements of KPI Ltd are taken care of by the JV partners. Since
KPI Ltd is based in India, hence it is also required to get its financial statements audited.

The company appointed new auditors for the audit of the financial statements for the year ended 31
March 2023 after doing all appointment formalities wherein auditors are required to ensure compliance
with Standards on Auditing and Internal Standards on Auditing.

As an expert you are required to advise the auditor about the requirements regarding auditor’s report for

audits conducted in accordance with both Standards on Auditing issued by ICAI and International
Standards on Auditing

OR
"KPI Ltd. is a company on which International Standards on Auditing are applicable along with Standard on
Auditing issued by the ICAI. The company appointed new auditors for the audit of the financial statement’s
year ended 31 March 2019 after doing all appointment formalities. Therefore, the auditor’s report referred
the International Standard on Auditing in addition to the Standard on Auditing issued by the ICAI.

As an expert, you are required to advise the auditor regarding auditor’s report for audits conducted in
accordance with both the Standards."
Answer ➢ An auditor may be required to conduct an audit in accordance with, in addition to the Standards on
Auditing issued by ICAI, the International Standards on Auditing or auditing standards of any other
jurisdiction. If this is the case, the auditor’s report may refer to Standards on Auditing in addition to the

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