Page 204 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Timing
Timing of Review Procedures: The auditor may perform many of the review procedures before or
simultaneously with the entity’s preparation of the interim financial information, such as updating the
understanding of the entity and its environment. Performing some of the review procedures earlier in the interim
period permits early identification and consideration of significant accounting matters affecting the interim
financial information.
Concurrent Audit and Review Procedures: The auditor, engaged to perform an audit of the annual financial
statements, may decide to perform certain audit procedures concurrently with the review of interim financial
information for convenience and efficiency.
Litigation or Claims: (SA 501)
Inquiries about Litigation or Claims: A review of interim financial information ordinarily does not require
corroborating the inquiries about litigation or claims, making it ordinarily not necessary to send an inquiry letter
to the entity’s lawyer.
Communication with Entity’s Lawyer: Direct communication with the entity’s lawyer may be appropriate if
a matter arises that causes the auditor to question the preparation of the interim financial information in
accordance with the applicable financial reporting framework.
Agreement or Reconciliation with the underlying accounting records (SA 330)
The auditor may obtain evidence that the interim financial information agrees or reconciles with the underlying
accounting records by tracing the interim financial information to:
(a) The accounting records, such as the general ledger, or a consolidating schedule that agrees or reconciles with
the accounting records; and
(b) Other supporting data in the entity’s records as necessary.
Subsequent Events (SA 560)
Up to date of review Report: The auditor should inquire whether management has identified all events up to
the date of the review report that may require adjustment or disclosure in the interim financial information.
After the date of review report: It is not necessary for the auditor to perform other procedures to identify events
occurring after the date of the review report.
Going Concern (Potential)
Change in assessment: The auditor should inquire whether management has changed its assessment of the
entity’s ability to continue as a going concern and consider the adequacy of the disclosure about such matters.
Doubt on Going Concern: When events or conditions cast doubt on the entity’s ability to continue as a going
concern, the auditor inquires of management as to its plans for future action and the feasibility of these plans.
No Corroboration Needed: It is not ordinarily necessary for the auditor to corroborate the feasibility of
management’s plans and whether the outcome of these plans will improve the situation.
Material Adjustment
Material Adjustment: When a matter arises that leads the auditor to question whether a material adjustment
should be made, the auditor should make additional inquiries or perform other procedures.
Example of Additional Procedures: If a significant sales transaction is questioned, the auditor performs
additional procedures, such as discussing the terms of the transaction with senior personnel or reading the sales
contract.

(CNO SRE 2410.080) Evaluation of Misstatements
Evaluation of Uncorrected Misstatements: The auditor should evaluate, individually and in the aggregate,
whether uncorrected misstatements are material to the interim financial information.
Inadequate Disclosures: Misstatements, including inadequate disclosures, are evaluated individually and in the
aggregate to determine whether a material adjustment is required for compliance with the applicable financial
reporting framework.

www.auditguru.in 10.18