Page 194 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
2. Inquiry about uncollectible accounts: The practitioner inquired with management about possible
uncollectible accounts receivable that might be impaired.
3. Possible Outcomes of Management's Response:
No Material Misstatement: The practitioner may conclude that the accounts receivable balance isn't likely to
be materially misstated, requiring no further action.
Material Misstatement Identified: The practitioner determines that the financial statements are materially
misstated, with no further procedures needed.
Insufficient Evidence: The practitioner believes there's a potential misstatement but lacks adequate evidence to
confirm it.
If uncertainty remains, the practitioner might request an analysis of post-balance sheet date receipts to identify
uncollectible accounts.
4. Evaluation of Additional Procedures:
Conclusion: The results might lead to either a confirmation that there's no material misstatement or a
confirmation of a material misstatement.
Continue additional procedures: If neither conclusion is reached, the practitioner must continue additional
procedures.
Scope Limitation: If the practitioner can't determine the accuracy of the accounts receivable balance, a scope
limitation exists, preventing an unmodified conclusion on the financial statements.
Subsequent events
1. Adjusting Event before Report date: If the practitioner becomes aware of events after the financial statement
date but before the report date that require adjustments or disclosures, they should ask management to correct
these misstatements.
2. No Obligation after Report date: The practitioner isn't obligated to perform procedures on the financial
statements after the report date. However, if a significant fact emerges after the report date but before the
financial statements are issued, actions are required.
2A. Discussion with Management: The practitioner should discuss any such significant post-report facts with
management or those charged with governance.
2B. Determining Amendments: The practitioner needs to ascertain if the financial statements require
amendments based on the new information.
2C. Management's Intention: If amendments are necessary, the practitioner should inquire about how
management plans to address the matter in the financial statements.
2D. No amendments: If management doesn't make the required amendments and the report has already been
provided, the practitioner should instruct management and those charged with governance not to release the
financial statements to third parties. If unamended financial statements are issued, the practitioner must take
suitable action to prevent reliance on their report.

(CNO SRE 2400.140) Written Representations
Importance of Written Representations.
- Written representations are an important source of evidence in a review engagement.
- Requesting written, rather than oral, representations may prompt management to consider such matters more
rigorously, enhancing the quality of the representations.
- If management modifies or does not provide the requested written representations, it may alert the practitioner
to possible significant issues.

WR for Management responsibility.
- The practitioner shall request management to provide a written representation on the fulfillment of its
responsibilities in the agreed terms of engagement.
- This representation shall include:

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