Page 18 - CA Final PARAM Digital Book.

• Significant matters have been raised for further consideration;(E.g., Accounting for
demerger)
• Appropriate consultations have taken place and the resulting conclusions have
been documented and implemented;(Consult Mr A in firm who has audited many
such cases)
• The work performed supports the conclusions reached and is appropriately
documented; (E.g., Check whether documents and explanation provide basis for
accounting done)
• The evidence obtained is sufficient and appropriate to support the auditor’s
report; and (E.g., Check that all areas are appropriately covered)
• The objectives of the engagement procedures have been achieved. (We are able
to form opinion with reasonable assurance)
• There is a need to revise the nature, timing and extent of work performed; (E.g.,
High Court should be obtained, also written representation of CFO on accounting)

➢ Basic Principle of Auditing on Delegation of Work
• Basic Principle of Delegation of Work Governing Audit ---Auditor can
delegate work but not responsibility.

Further, one of the basic principles, which govern the auditor’s professional responsibilities,
and which should be complied with wherever an audit is carried, is that when the auditor
delegates work to assistants or uses work performed by other auditor and experts, he will
continue to be responsible for forming and expressing his opinion on the financial
information.

• Reliance of Work with Adequate Skill & Care.
However, he will be titled to rely on work performed by others, provided he exercises
adequate skill and care and is not aware of any reason to believe that he should not have so
relied. This is the fundamental principle which is ethically required as per Code of Ethics.

• Direct / Supervise / Review Work.
However, the auditor should carefully direct, supervise and review work delegated. He
should obtain reasonable assurance that work performed by other auditors/experts and
assistants is adequate for his purpose.

Part III – Case Discussion
➢ Report not signed because of death, other ca signed without review just relying on
work done by his partner.
In the given case, all the auditing procedures before the moment of signing of final report have been
performed by CA. Suresh. However, the report couldn’t be signed by him due to his unfortunate
death. Later on, CA. Chandra signed the report relying on the work performed by CA. Suresh.

Part IV – Conclusion
➢ Non-compliance of SA 220 & no adequate skill and due care exercised.
Here, CA. Chandra is allowed to sign the audit report, though, will be responsible for expressing the
opinion. He may rely on the work performed by CA. Suresh provided he further exercises adequate
skill and due care and review the work performed by him.
Author’s Note

Second point in part-I which deals with “Basic Principle of Auditing on Delegation of Work” is not given in SA
220, this is taken from Traditional Theory of Audit. It is easy to understand and retain and underlying
principles is also same as SA 220. As ICAI has covered this in their recent answer students should also cover

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