Page 92 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
Matters/Factors which can be considered (Shortcut: Very Amazing FLOSS)
• The Volume of activity in TBD
• Amounts in FST
• The cause and Frequency of the exceptions detected.
• The Likelihood of the deficiencies leading to MMST.
• The interaction with Other deficiencies in internal control.
• The Susceptibility to loss or fraud of the related asset or liability.
• The Subjectivity and complexity of determining estimated amounts, such as fair value accounting estimates.
The importance of the controls to the financial reporting process; for example: (Shortcut: Public –
FORAM)
• Controls over the Period-end financial reporting Process (such as controls over non-recurring journal entries).
• Controls over the prevention and detection of Fraud.
• Controls over significant transactions Outside the entity's normal course of business.
• Controls over significant transactions with Related parties.
• Controls over the selection and application of significant Accounting policies.
• General Monitoring controls (such as oversight of management).

(CNO-- SA265.100) Timing Of Communicating Significant Deficiency
For Listed Co
• Before Dt of approval of FST
For other Entities
• Before Dt of Final Assembly of audit File
First give oral communication & then go for written communication

Extra Concepts Apart from those Covered in ICAI Module but relevant for Exams.

SA 315 (Risk)

IDENTIFYING AND ASSESSING THE RISKS OF MATERIAL MISSTATEMENT THROUGH UNDERSTANDING THE
ENTITY AND ITS ENVIRONMENT

(CNO-SA315.020) Risk Assessment Procedure (How to Collect Information?)
Definition
• To obtain understanding Entity & Environment Including ICS
• Shall Include (Shortcut: Easy to Difficult in Practical Life)
o Inquiry.
o Analytical Procedures.
o Observation & Inspection.

(CNO-SA315.040) Understanding of The Entity and Its Environment.
(Which Basic Information Should Be Collected?)
The auditor shall obtain an understanding of the following: (Shortcut: Broad to Narrow)
Industry Related:
• Industry
• Regulatory Requirement
• Other External Factors (Including Applicable Financial Reporting Framework)
Nature of Entity & Related Points:

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