Page 191 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
2A. Read Contract: For example, if in the course of obtaining an understanding of the entity, the practitioner
becomes aware of a significant contract the practitioner may choose to read the contract.
2B. Reviewing Accounting Records: The practitioner may consider, reviewing the accounting records with a
view to identifying significant or unusual transactions that may require specific attention in the review.
2C. Objective Remains Unchanged: The fact that the practitioner may deem it necessary to perform other
procedures does not alter the practitioner’s objective of obtaining limited assurance in relation to the financial
statements as a whole.

4A. All Material Items: To address all material items in the financial statements, including disclosures.
4B. Focus on Likely Material Misstatements: To focus on addressing areas in the financial statements where
material misstatements are likely to arise.
4C. Achieving SRE Objectives: The requirements relating to designing and performing of inquiry and analytical
procedures, and procedures addressing specific circumstances, are designed to enable the practitioner to achieve
the objectives of this SRE.
Inquiry:
Definition: In a review, inquiry includes seeking information from management and other persons within the
entity, as the practitioner considers appropriate in the engagement circumstances.

(Shortcut: FUN @ MADRAS And NCR)
Fraud: Existence of any actual, suspected or alleged fraud.
Significant or Unusual Transactions: About significant, complex or unusual transactions.
Non-monetary Transactions: Material non-monetary transactions or transactions for no consideration in the
financial reporting period under consideration.
Matters arising from other procedures: Matters arising in the course of applying other procedures and
addressing identified inconsistencies.
Accounting Estimates: Inquiries may include matters such as those relating to making of accounting estimates.
Doubts about Going Concern: Events or conditions that appear to cast doubt on the entity’s ability to continue
as a going concern.
Related Parties: Identification of related parties.
Actions at meetings: Inquiries may encompass actions at meetings of owners, those charged with governance,
and other relevant proceedings that influence the financial statements' information and disclosures.
Subsequent Events: Events occurring between the date of the financial statements and practitioner’s report.
Management’s Assessment of Going Concern: Basis for management’s assessment of the entity’s ability to
continue as a going concern.
Non-financial Data: The practitioner may extend inquiries to obtain non-financial data.
Commitments and Obligations: Material commitments, contractual obligations or contingencies that have
affected or may affect the entity’s financial statements including disclosures.
Regulatory Communications: Communications the entity has had or anticipates with regulatory agencies.
Evaluating the responses provided by the management is integral to the inquiry process. The practitioner
evaluates the consistency and reasonableness of management’s responses, considering other procedure results
and understanding of the entity and its industry.
(b) Analytical procedures:

Data from accounting system: In designing analytical procedures, the practitioner shall consider whether the
data from the entity’s accounting system and accounting records are adequate for the purpose of performing the
analytical procedures.

Focus of a Review: In a review, the practitioner mainly focuses upon inquiry and analytical procedures for
obtaining sufficient appropriate evidence as the basis for conclusion on financial statements as a whole.
Why “Inquiry” and “Analytical procedures” are important in Review?

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