Page 105 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
• Assumptions and methods are used by the management's expert
Evaluating Work of Expert
Source Data Evaluation: If the expert's work significantly relies on source data, the auditor should assess its
relevance, completeness, and accuracy.
Assumptions and Methods: If significant assumptions and methods are used in the expert's work, their
relevance and reasonableness should be evaluated.
Evaluate Expert’s Findings: The auditor should assess the relevance and reasonableness of the expert's
findings or conclusions, their consistency with other audit evidence, and whether they have been
appropriately reflected in the financial statements.

(CNO-SA500.120) Information produced by entity to be used as audit evidence
Relevant & Reliable: If auditor wants to use any information as audit evidence he should ensure that it
should be relevant & Reliable.
Ensure: Further if any information is produced by the entity then before considering it as evidence he should
ensure that information is
(Shortcut: - APCD)
• Accurate
• Sufficiently Precise & Detailed for auditor's purpose.
• Complete

(CNO-SA500.140) Inconsistency in or doubts over reliability of audit evidence
Inconsistency or Doubt: If auditor come across a situation where
Information with one source is inconsistent with another source.
OR
Auditor has doubt over reliability of information to be used as audit evidence.
Modification of Audit Procedures: The auditor shall determine what modification should be done to audit
procedures as necessary to resolve the matter It should consider the effect of that matter if any on other aspects
of audit.

SA 501

AUDIT EVIDENCE—SPECIFIC CONSIDERATIONS FOR SELECTED ITEMS

(CNO-SA501.020) Objective as Per SA 501
Inventory: Audit evidence for existence and condition of inventory.
Litigation & Claims: Completeness of litigation and claims involving the entity.
Segment Reporting: Presentation and disclosure of segment information as per the financial reporting
framework.

(CNO-SA501.040) Existence & Condition of Inventory (Shortcut: - MOTI Reconciliation)
Management's Instructions: Assess management's instructions and procedures for recording and controlling
physical inventory counting results, including control over inventory movement, application of control
activities, and procedures for estimating physical quantities.
Observe: Observe the execution of management's count procedures to ensure they are carried out accurately
and effectively.
Test Count: Perform test counts to cross-verify the accuracy of management's count procedures and results.
Inspect: Physically inspect the inventory to verify its existence and condition, including the stage of
completion of work in progress, slow moving, obsolete, damaged items, and third-party owned inventory.

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