Page 96 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
(CNO-SA320.100) Revision of Materiality
During audit, if auditor gets new information that would cause him to determine different materiality.
If auditor concludes lower materiality level- Auditor shall determine need to revise
• Performance Materiality
• NTE of FAP
Examples when revision may be required:
• New information, decision to dispose major part of business during the year.
• Chg. In auditor’s understanding as result of FAP during the year.
• During year actual financial result substantially different from anticipated end of the year.

(CNO-SA320.120) Documenting the Materiality
The audit documentation shall include the following amounts and the factors considered in their
determination:
FST Level Materiality: Materiality for the financial statements as a whole.
TBD Level Materiality: The materiality level or levels for particular classes of transactions, account balances or
disclosures
Performance materiality.
Any revision in above as the audit progressed.

SA 330

THE AUDITOR RESPONSE TO ASSESSED RISK

(CNO-SA330.020) Response to Risk
Overall Responses for FST Level Risk
Team
Assigning more experienced staff or those with special skills or using experts
Procedures
Ask to maintain professional skepticism.
Incorporating elements of unpredictability in the selection of further audit procedures FAP to be performed.
Making general changes to the NTE of audit procedures
Supervision.
Providing more supervision.

Further Audit Procedures for assertion level risk:
• Test of Controls
• Substantive Procedures.

(CNO-SA330.040) Tests of Controls
Definition:
Audit procedure performed to obtain audit evidence of effectiveness of:
• Design of ICS and accounting system (Design to prevent, detect & correct MMST
• Operation of ICS throughout the period.
Which controls should be tested?
Design & performed test of controls for relevant controls when.
• Auditors assessment of RMM includes expectation that controls are operating effectiveness.
• Substantive procedures alone cannot provide S&A audit evidence. (Highly Automated)
Nature of test of controls:

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