Page 62 - CA Final PARAM Digital Book.

Accordingly, CA Kukreja is correct in asking the branch auditors to share with him the summary of their audit
procedures and findings in respect of the accounts of the branches examined by them.

Further, CA Kukreja has asked one of the branch auditors to share with him the working papers with respect
to the branches examined by such branch auditor for the former’s review and return.

SA 230 issued by ICAI on Audit Documentation, and “Standard on Quality Control (SQC) 1, provides that,
unless otherwise specified by law or regulation, audit documentation is the property of the auditor. 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.
Accordingly, it is the discretion of the branch auditor as the working papers with respect to the branches
examined by the branch auditor are the property of the branch auditor.
So, CA Kukreja is not correct in asking the branch auditor to share with him the working papers with respect
to the branches examined by the branch auditor.

QNO Branch Audit (Co-Ordination) Old Course – (M08R, N16E, PM17, N20M, M23M)
101.000 TITANIUM CNO—SA600.080
“There should be sufficient liaison between a principal auditor and other auditors” Discuss the above
statement and state in this context the reporting considerations, when the auditor uses the work
performed by other auditor.

B Ltd is the Subsidiary company of A Ltd ABC & Associates has been appointed as auditor of A Ltd for the
Financial Year 2014-15 and XYZ & Associates has been appointed as auditor of B Ltd for the year 2014-15
Explain the role of ABC & Associates and XYZ & Associates as auditors of the parent company and
subsidiary respectively
Answer Role of Auditor in case of Parent Company and Subsidiary Company: As per SA 600 “Using the Work of
Another Auditor”, there should be sufficient liaison between the principal auditor (hereinafter referred as

auditor of Parent Company and the other auditor (hereinafter referred as auditor of Subsidiary Company).

Role of Principal Auditor (Ram & Associates- Auditor of Parent Company):
(i) It is necessary to issue written communication(s) as a principal auditor to the other auditor.
(ii) The principal auditor should advise the other auditor of any matters that come to his attention that he
thinks may have an important bearing on the other auditor’s work.
(iii) When considered necessary by him, the principal auditor may require the other auditor to answer a
detailed questionnaire regarding matters on which the principal auditor requires information for discharging
his duties.

Role of Other Auditor (Hanuman & Associates- Auditor of Subsidiary Company):

(i) The other auditor, knowing the context in which his work is to be used by the principal auditor, should co-
ordinate with the principal auditor. For example, by bringing to the principal auditor’s immediate attention
to any significant findings requiring to be dealt with at entity level, adhering to the time-table for audit of
the component, etc.
(ii) He should ensure compliance with the relevant statutory requirements.
(iii) The other auditor should respond to the questionnaire sent by Principal Auditor on a timely basis.

QNO Access to Working Papers of Branch Auditor Old Course – (M18E)
103.050 TITANIUM CNO—Unique
B is the Principal Auditor of ABC Co. Ltd., with 8 branches audited by 8 Branch Auditors. B wanted to ensure
that the works of Branch Auditors were adequate for the purpose of his audit. Hence he insisted on Branch
Auditors to get familiar with a check list he prepared for branches and, besides, required them to share
the working papers compiled by them for his review and return. Is Principal Auditor within his right in
asking for such sharing of working papers?

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