Page 471 - CA Final PARAM Digital Book.

QNO Access to Working Papers Old Course - (N14E, P17M)
7.000 UNIQUE
Discuss the Auditor's responsibility to provide access to his audit working papers to Regulators and

third parties.
Answer Part I -- Relevant Standards & Laws
▪ Schedule 2, Part 1, Clause 1 of CA Act

▪ SQC 1 “Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information,
and -Other Assurance and Related Services Engagements”.
▪ SA 200 on “Overall Objectives of the Independent Auditor
▪ SA 230 on “Audit Documentation”
Part II -- Requirements of Relevant Standards & Laws
➢ As per Schedule 2, Part 1, Clause 1 of CA Act
No Access to Third Parties Unless Required by Law or Permitted by Client
The auditor should not provide access to working papers to any third party without specific
authority or unless there is a legal or professional duty to disclose. Clause (1) of Part I of Second
Schedule to the Chartered Accountants Act, 1949 states that a Chartered Accountant in practice
shall be deemed to be guilty of professional misconduct if he discloses information acquired in the
course of his professional engagement to any person other than his client, without the consent of
his client or otherwise than as required by law for the time being in force.

➢ SQC 1—Same two Conditions
Further, Standard on Quality Control (SQC) 1, “Quality Control for Firms that Perform Audits and
Reviews of Historical Financial Information, and Other Assurance and Related Services
Engagements”, provides that, unless otherwise specified by law or regulation, audit
documentation is the property of the auditor.

➢ SA 200 – Respect Confidentiality & Same two Conditions
SA 200 on “Overall Objectives of the Independent Auditor and the conduct of an audit in accordance
with Standards on Auditing” also reiterates that, “the auditor should respect the confidentiality of
the information obtained and should not disclose any such information to any third party without
specific authority or unless there is a legal or professional duty to disclose”. If there is a
request to provide access by the regulator based on the legal requirement, the same has to be
complied with after informing the client about the same.

➢ SA 230 – Can be used for additional purposes like external inspections if it is required by
applicable law or regulatory requirement.
As per SA 230, Audit documentation serves a number of additional purposes, including the enabling
the conduct of external inspections in accordance with applicable legal, regulatory or other
requirements.
Part III -- Conclusion
➢ Access to Regulators – Should give Access as required by law or regulations.
Therefore, it is auditor’s responsibility to provide access to his audit working papers to
Regulators as required by applicable law or regulations.

➢ Access to Client – At his discretion, should not affect validity, purpose of the work and in
case of assurance, should not affect Independence.
He may at his discretion, make portions of, or extracts from, audit documentation available
to clients, provided such disclosure does not undermine the validity of the work performed, or, in
the case of assurance engagements, the independence of the auditor or of his personnel.

➢ Access to Third Parties – Auditor’s Discretion, Subject to 2 Conditions
Whereas it’s at auditor’s discretion, to make portions of, or extract from his working paper to
third parties.

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