Page 64 - CA Final PARAM Digital Book.

Information, and Other Assurance and Related Services Engagements”, issued by the
Institute, 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.”

Conclusion
In the light of aforesaid, principal auditor was not within his right for asking for such sharing
of working papers. It depends upon the discretion of auditor.
Author’s Note

• It must to noted that documents of branch auditor are his own property, but he can share this
with principal auditor after taking permission from client such thing is common, being owner
doesn’t mean he cannot share, in fact it means, sharing can be done at discretion of branch
auditor.
• So final conclusion as per SA 600 , Principle Auditor can review working papers of branch auditor
but branch auditor will decide whether he wants to share documents or not.

QNO Division of Responsibility New Course – (SM23)
103.500 TITANIUM CNO-- SA600.120
CA. Sourabh is engagement partner conducting statutory audit of BBI Bank for SBT & Associates. The bank
has 1034 branches spread all over the country which are audited by branch auditors. In respect of one
large branch audited by a branch auditor, there were errors in NPA classification of many advances which
were not pointed out by branch auditor in his report through memorandum of changes and NIL
memorandum of changes was reported electronically.

During overall review of financial statements of bank by statutory auditor, the above said errors did not
come into light. The statutory auditor had also called soft copies of internal inspection report and
concurrent audit reports of above branch as part of overall review procedures. However, these reports
did not point towards any irregularities in such accounts.

Would statutory auditor of bank be liable for above lapses? What precautions have to be taken by him
while expressing opinion considering possibilities of such situations?
Answer
SA 600 states that the principal auditor would not be responsible in respect of the work entrusted to the

other auditors, except in circumstances which should have aroused his suspicion about the reliability of the
work performed by the other auditors. When the principal auditor has to base his opinion on the financial
information of the entity as a whole relying upon the statements and reports of the other auditors, his report
should state clearly the division of responsibility for the financial information of the entity by indicating the
extent to which the financial information of components audited by the other auditors have been included
in the financial information of the entity, e.g., the number of divisions/branches/subsidiaries or other
components audited by other auditors.

In the given situation, nothing has come to light of statutory auditor which would arouse his suspicion about
reliability of work performed by branch auditor. Therefore, he would not be responsible for work performed
by branch auditor.

Further, it should be clearly stated in the report that 1034 branches of bank have been audited by branch
auditors.

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