Page 203 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Determining Nature of Review Procedures for Components: Besides, the auditor determines the nature of
the review procedures, if any, to be performed for components and, where applicable, communicates these
matters to other auditors involved in the review.

(CNO SRE 2410.060) Inquiries, Analytical and other Review procedures
Inquiries and Analytical Procedures: The auditor should make inquiries, primarily of persons responsible for
financial and accounting matters, and perform analytical and other review procedures to conclude whether the
interim financial information is prepared, in all material respects, in accordance with the applicable financial
reporting framework.
Ordinarily No inspection, observation or confirmation: A review ordinarily does not require tests of the
accounting records through inspection, observation or confirmation. Procedures are ordinarily limited to
making inquiries and applying analytical and other review procedures, rather than corroborating information
concerning significant accounting matters.
Influence of Understanding and Risk Assessments: The auditor’s understanding of the entity and its
environment including its internal control, the results of the risk assessments relating to the preceding audit and
consideration of materiality affect the nature and extent of the inquiries made, and analytical and other review
procedures applied.
The auditor ordinarily performs the following procedures: -
1. Past Audit Modifications: Assessing the influence, if any, of issues leading to modifications in the audit or
review report, accounting adjustments, or unadjusted misstatements during the previous audit or reviews.
2. Meeting Analysis: Analyzing meeting minutes of shareholders, those in charge of governance, and relevant
committees to identify potential impacts on interim financial information. This includes inquiring about matters
discussed in meetings without available minutes.
3. Inquire with members of management who are responsible for preparation of FST
i. Preparation, Presentation of FST:
- Interim financial information's alignment with the applicable financial reporting framework.
- New transactions leading to a new accounting principle application.
- Assumptions relevant to fair value measurement or entity's action courses.
ii. Critical Matters:
- Effects of complex situations like business combinations or segment disposals.
- Related party transactions' accounting and disclosure.
- Known uncorrected misstatements in interim financial information.
- Queries arising from review procedures.
iii. Fraud and Non-compliance:
- Knowledge of fraud involving management or key employees.
- Allegations of fraud affecting the interim financial information.
- Potential non-compliance with laws impacting interim financial information.
- Compliance with debt covenants.
iv. Changes:
- Changes in contractual obligations.
- Changes in accounting principles or application methods.
- Changes in contingent liabilities, including litigation.
5. Analytical Procedures: Apply analytical procedures to the interim financial information to identify any
unusual relationships or individual items that could indicate a significant error in the financial information.
6. Communicate with other auditors: The auditor should effectively communicate with other auditors who
are reviewing the interim financial information of the significant components of the reporting entity.
7. Interim Information Review: Review the interim financial information to determine if there is anything
that suggests it is not prepared in accordance with the applicable financial reporting framework.

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