Page 110 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
(CNO-SA505.100) Management's Refusal to Allow The Auditor To Send A Confirmation Request
Inquiry
Reasons: Inquire as to management's reasons for refusing to allow the auditor to send a confirmation request.
Evidence: Seek audit evidence regarding the validity and reasonableness of management's refusal.
Evaluate
Effect on RMM & ROF: Evaluate the implications of management's refusal on the auditor's assessment of the
relevant risks of material misstatement. Include the risk of fraud (ROF) in the evaluation.
Effect on NTE: Assess the impact on the nature, timing, and extent of other audit procedures.
Alternative audit procedures
Alternative Procedures: Perform alternative audit procedures to obtain relevant and reliable audit evidence.
TCWG: If reasons are unreasonable or unable to obtain reliable evidence, communicate with those charged
with governance in accordance with SA 260.
Auditor’s Opinion: Determine the implications for the audit and the auditor's opinion in accordance with SA
705.

SA 510

INITIAL AUDIT ENGAGEMENTS - OPENING BALANCES

(CNO-SA510.020) Applicability & Objectives Of Sa 510
Applicability
Initial Engagement: Refers to audits where prior period's financial statements were either not audited or were
audited by a different auditor.
Objective
Material Misstatements: Ensure no material misstatements in opening balances that affect the current
period's financial statements.
Consistency of AP: Confirm that accounting policies in opening balances are consistently applied in the
current period or any changes are properly accounted for and disclosed as per the financial reporting
framework.

(CNO-SA510.040) Audit Procedures To Examine Opening Balances
Check whether op Bal is misstated.
Evidence from Last year
• Whether cl. Bal have been correctly brought forward from LY ledger
• Agree op bal with the most recent FST of prior period.
• Read predecessor AR, if any modification evaluates whether it leads to RMM.
• If any prior period item, then trace it to previous period documents.
Evidence from current year
• Evaluate whether current year audit procedure provide evidence relevant to op Bal.
• Perform specific audit procedure to obtain evidence about op bal Reco / comparison/ Documents.
Misstatement Detected
• If misstatement is detected in op bal then perform additional procedures
• If there is misstatement in current year also follow SA 450
Consistency of Accounting Policy: Obtain S&A evidence whether there is consistency in implementation of
A/C policy, if there are changes whether properly accounted presented, disclosed

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