Page 77 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Relevant Controls: Identifying and assessing the design and implementation of relevant internal control
procedures.
Communicating Internal Control Deficiency: Communicating any material weaknesses in internal control
design and implementation to management and those charged with governance and making an informed
assessment of the risks of material misstatement at the financial statement and assertion levels.

(CNO-MRI.220) Risk response (Audit Procedures)
1. Purpose:
• Design and perform further audit procedures to respond to assessed risks.
• Obtain evidence to support the audit opinion.
2. Audit Planning Considerations: (Shortcut AIM at USA)
• Assertions: Address situations where substantive procedures alone are insufficient, e.g., highly automated
transactions.
• Internal Controls: Determine if testing internal controls can reduce other substantive procedures.
• Management Override: Address potential management overrides or fraud.
• Unpredictability: Incorporate unpredictability in performed procedures.
• Significant Risks: Address identified significant risks.
• Analytical Procedures: Use substantive analytical procedures to potentially reduce other procedures.
3. Audit Procedures:
• TOC: Test the effectiveness of internal controls.
• SAP: Include tests of details and analytical procedures.
4. Final Control Risk Assessment:
• Before concluding, confirm the control risk assessment based on substantive procedures and obtained
evidence.
• For deviations from accounting and internal control systems, make inquiries for implications.
• If deviations indicate that the preliminary assessment isn't supported, amend it unless other control tests
support it.
• Modify planned substantive procedures if the control risk assessment needs revision.

(CNO-MRI.240) Reporting
1. Evidence Assessment:
• Assess audit evidence for sufficiency and appropriateness.
• Evaluate appropriateness of conclusions from performed work.
• Ensure evidence reduces audit risk to a low level.
2. Risk Evaluation:
• Check for changes in assessed risk levels.
• Identify any suspicious circumstances.
3. Additional Audit Procedures:
• Assess any additional risks.
• Perform further audit procedures as necessary.
4. Communication:
• Report audit findings to management and governance entities.
5. Opinion Formation:
• Form an audit opinion.
• Decide on wording for the auditor's report.

(CNO-MRI.260) Internal Control System - Nature, Scope, Objectives and Structure

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