Page 220 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Reporting Identified Deviations: If deviations have been identified, the service auditor shall include the extent
of testing performed that led to identification of the deviations (including the sample size where sampling has
been used), and the number and nature of the deviations noted.
Obligation to Report Deviations: The service auditor shall report deviations even if, on the basis of tests
performed, the service auditor has concluded that the related control objective was achieved.
Modified Opinions - If the service auditor concludes that:
No Fairness: The service organization’s description does not fairly present, in all material respects, the system as
designed and implemented.
No Suitability: The controls related to the control objectives stated in the description were not suitably designed,
in all material respects.
No Effectiveness: In the case of a type 2 report, the controls tested, which were those necessary to provide
reasonable assurance that the control objectives stated in the service organization’s description of its system were
achieved, did not operate effectively, in all material respects or.
Inability to Obtain Sufficient Evidence: The service auditor is unable to obtain sufficient appropriate evidence,
the service auditor’s opinion shall be modified, and the service auditor’s assurance report shall contain a clear
description of all the reasons for the modification.

(CNO 3402.100) Documentation
1. Documentation Requirement: The service auditor shall prepare documentation that is sufficient to enable
an experienced service auditor, having no previous connection with the engagement, to understand:
2A. Procedures: The nature, timing, and extent of the procedures performed to comply with this SAE and
applicable legal and regulatory requirements.
2B. Results and Evidence Obtained: The results of the procedures performed, and the evidence obtained and
2C.Significant Matters and Conclusions: Significant matters arising during the engagement, and the
conclusions reached thereon and significant professional judgments made in reaching those conclusions

SAE 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial
Information Included in a Prospectus

(CNO 3420.020) Introduction.
SAE 3420: SA 3420 deals with reasonable assurance engagements undertaken by a practitioner to report on the
responsible party’s compilation of pro forma financial information included in a prospectus.
Applicability: It applies where such reporting is required by securities law or regulation of the security exchange
in the jurisdiction in which the prospectus is to be issued or this reporting is generally accepted practice in such
jurisdiction.
What is Pro forma financial information?
Definition of Pro Forma Financial Information: Pro forma financial information refers to financial
information shown together with adjustments to illustrate the impact of an event or transaction on unadjusted
financial information as if the event had occurred or the transaction had been undertaken at an earlier date
selected for purposes of the illustration.
Usage in Offer Documents: The Pro forma financial information is, normally, used in the offer documents to
demonstrate the effect of a transaction on the financial statements of a company as if those transactions had
occurred at an earlier date.
Pro Forma B/S and P&L: The Pro forma financial information may take the form of Statement of Profit and
Loss and Balance Sheet to illustrate how the transactions might have affected the assets, liabilities and earnings
of the Issuer. They also include notes in relation to the significant aspects of the transactions, assumptions used
to prepare the Pro forma financial information and the adjustments made.

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