Page 206 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Consulting a Third Party: The auditor may request management to consult with a qualified third party to
resolve the apparent misstatement of fact if there are disagreements or uncertainties.
Management’s Refusal to Amend: If an amendment is necessary to correct a material misstatement of fact and
management refuses to make the amendment, the auditor considers taking further action as appropriate.
Notifying Governance and Legal Advice: Such further actions may include notifying those charged with
governance and obtaining legal advice.

(CNO SRE 2410.140) Communication
1A. Communicate MMST to appropriate level of management: When a matter comes to the auditor’s
attention, indicating a necessity for a material adjustment to the interim financial information, the auditor
should communicate this matter promptly to the appropriate level of management.
1B. Management’s Inappropriate Response: If management does not respond appropriately within a
reasonable period of time, the auditor should inform those charged with governance as soon as practicable.
2A. Inappropriate Response from TCWG: When those charged with governance do not respond appropriately
within a reasonable period, the auditor should consider modifying the report, withdrawing from the
engagement, or resigning from the appointment to audit the annual financial statements.
3A. Communication of Fraud or Noncompliance: Upon discovering evidence of fraud or noncompliance with
laws and regulations, the auditor should communicate the matter promptly to the appropriate level of
management, considering the likelihood of collusion or involvement of a member of management. The auditor
also considers the need to report such matters to those charged with governance and evaluates the implication
for the review.
3B. Communicate Matters of Governance Interest: The auditor should communicate relevant matters of
governance interest that arise from the review of interim financial information to those charged with governance,
especially matters important and relevant to overseeing the financial reporting and disclosure process.
4A. Oral or Written Communication: The auditor’s decision whether to communicate orally or in writing is
influenced by factors such as the nature, sensitivity, and significance of the matter, and the timing of such
communications.
4B. Documentation of Oral Communication: If the information is communicated orally, the auditor
documents the communication.

(CNO SRE 2410.160) Reporting the Nature, Extent and Results of the Review of Interim Financial
Information
The auditor should issue a written report that contains the following:
Title: An appropriate title.
Addressee: An addressee, as required by the circumstances of the engagement.
Introductory Para:
Management's Responsibility: The report should state that management is responsible for the preparation and
fair presentation (or just preparation and presentation, as applicable) of the interim financial information in
accordance with the applicable financial reporting framework.
Auditor's Responsibility: It should include a statement that the auditor is responsible for expressing a
conclusion on the interim financial information based on the review.
Conduct of the Review: The report should state that the review was conducted in accordance with SRE 2410
and consists of making inquiries, primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures.
Scope of Review vs Audit: A statement should clarify that a review is substantially less in scope than an audit,
does not enable the auditor to obtain assurance that they would become aware of all significant matters identified
in an audit, and accordingly, no audit opinion is expressed.

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