Page 39 - CA Final PARAM Digital Book.

Part III -- Facts J.A Is Entitled to assume that
➢ In the present case, there was no documentation
for the division of work and the responsibility of
revenue aspect was delegated to DEF & Co., in a a
which gross understatement of revenue has been The other J.A s have brought to the Notice of said
joint auditor:
observed. ABC & Co. has not reviewed the work as 1.Any Departure from app. FRF or
they have put their reliance on the orc performed 2.Sig. observations,
by DEF & Co. relevant to their responsibilities .

b b
Part IV -- Conclusion 1.Other J.A s have performed their part
➢ Hence, there is a violation of SA 299 as the division of the audit worK.
2.Work has been performed as per
Note : Point 5
of work has not been documented. In the normal Relevant SA s (ICAI). helps in
1.Documentation
course DEF & Co. will be held liable for negligence. Avoiding dispute or confusion
c c
If DEF & Co. refuses to accept sole responsibility for among the J.A regarding the
Any Review/Tests by other
J.A to ascertain the Same
the fault, ABC & Co. have to prove by other ways scope of work.
and means of evidence that the particular area of is NOT NECESSARY.
audit was exclusively done by DEF & Co. only.

Author’s Note :
Second Question of Dice Ltd is similar to 1st question i.e. ABC & Co. and DEF & Co. They both mention
that “there was no documentation for the division of work between the joint auditors” , however the
answer of Dice LTD also speaks about Responsibility of Joint Auditors as the question of Dice LTD also asks
for “Comment on the above situation with regard to responsibilities among joint auditors. So the answer
of DICE Ltd will be a combination of QNO 27.100 & 28.100.

QNO Collective Planning Separate Execution New Course – (SM23)
28.050 TITANIUM CNO-- SA299.100
"Four audit firms viz. GPR & Co., MKS & Co., CY & Associates and DES & Associates have been appointed

for conducting statutory audit of KNB Bank, a public sector bank in accordance with regulatory guidelines.
The professional work was divided by audit firms on the basis of zones of bank. However, work relating
to “IT Systems and controls” was not allocated by them due to its very nature.

While planning for the above common work area, it was decided to test IT general controls, application
controls and IT dependent manual controls. Planned key audit procedures relating to this common area
also included testing design and operating effectiveness of controls over “computer operations including
back-up, batch-processing and data centre security”.

The actual audit procedures pertaining to “testing controls over batch processing” were performed by
team of DES & Associates. In case work in relation to above audit procedures is not performed
professionally by DES & Associates, discuss where responsibility for such lapses would lie in line with SA
299?"
Answer In respect of common areas, the joint auditors are only responsible for appropriateness of nature, timing
and extent of planned audit procedures agreed among them. The responsibility of individual execution lies

with concerned joint auditor.

In the instant case, audit procedures relating to testing design and operating effectiveness of controls over
computer operations including back-up, batch-processing and data canter security have been planned jointly
as it is a common area.

However, audit procedures relating to testing controls over batch processing were actually performed by
team of DES & Associates although these were planned jointly. In case of any lapses in performing such
procedures, DES & Associates would be responsible.

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