Page 205 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Exercise of Professional Judgment: The auditor exercises professional judgment in evaluating the materiality
of any misstatements that the entity has not corrected.

(CNO SRE 2410.100) Management representations.
1A. Responsibility of FST: The interim financial information is prepared and presented in accordance with the
applicable financial reporting framework.
1B. Responsibility of ICS: The auditor should obtain written representation from management that it
acknowledges its responsibility for the design and implementation of internal control to prevent and detect fraud
and error.

(Shortcut in sequence of Importance)
2A. Disclosure of Non-compliance with Laws: Management has disclosed to the auditor all known actual or
possible non-compliance with laws and regulations whose effects are to be considered when preparing the
interim financial information.
2B. Disclosure of Frauds or Suspected Frauds: Management has disclosed to the auditor all significant facts
relating to any frauds or suspected frauds known to management that may have affected the entity.
2C. Disclosure of Risk Assessment Results: It has disclosed to the auditor the results of its assessment of the
risks that the interim financial information may be materially misstated as a result of fraud.
2D. Disclosure of Significant Subsequent Events: Management has disclosed to the auditor all significant
events that have occurred subsequent to the balance sheet date and through to the date of the review report that
may require adjustment to or disclosure in the interim financial information.

(CNO SRE 2410.120) Auditor’s Responsibility for Accompanying Information (Like other Info of SA 720)
Material Inconsistency
Reading Accompanying Information: The auditor should read the other information that accompanies the
interim financial information to consider whether any such information is materially inconsistent with the
interim financial information.
Identifying Material Inconsistency: If the auditor identifies a material inconsistency, the auditor considers
whether the interim financial information or the other information needs to be amended.
Amendment in Interim Financial Information: If an amendment is necessary in the interim financial
information and management refuses to make such amendment, the auditor considers the implications for the
review report.
Amendment in Other Information: If an amendment is necessary in the other information and management
refuses to make such amendment, the auditor considers including in the review report an additional paragraph
describing the material inconsistency or taking other actions.
Withold or withdraw: The auditor may take actions such as withholding the issuance of the review report or
withdrawing from the engagement, especially if alternative measures presented by management are confusing
and potentially misleading.
Other information appears to be materially. misstated
Read OI: While reading the other information for the purpose of identifying material inconsistencies, an
apparent material misstatement of fact may come to the auditor’s attention.
Material Misstatement in OI: If a matter comes to the auditor’s attention that causes the auditor to believe that
the other information appears to include a material misstatement of fact, the auditor should discuss the matter
with the entity’s management.
Discussing with Management: When discussing the matter with the entity’s management, the auditor
considers the validity of the other information and management’s responses to the auditor’s inquiries, and
whether valid differences of judgment or opinion exist.

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