Page 98 - CA Final Audit Titanium Full Book. (With Cover Pages)

CA Ravi Taori
If Yes- Then Test Controls in Current year.
If No- Then:
• Can rely on PY audit evidence.
• TOC atleast once in every Third audit So as to avoid testing all controls in single year
& then no testing for next 2 year
• Test some controls each year

(CNO-SA330.080) Evaluating the Operating Effectiveness of Controls
Specific inquiries by auditor when deviations from controls are detected.
Evaluate Results
• No deviation - Good
• Deviation Exist - Do Specific Enquiry - Whether:
o Results are providing Reasonable basis. (Tolerable rate of deviation >Actual Rate of deviation)
o Additional Audit procedure required.
▪ Resampling
▪ Check all signature of Juniors.
o Areas where only Substantive Procedure can help .

(CNO-SA330.100) Designing and Performing Substantive Procedures
1. Auditor shall Design & Perform Substantive Procedures for each MATERIAL TBD, Irrespective of
assessed RMM, because:
• Risk assessment is judgement based & may not identify all risks.
• There are inherent limitations in ICS (Including Mgt. override)
2. Auditor may perform any of the following:
• Only substantive analytical procedures
• Only test of details
• Combination of the above 2.
2A. Substantive Analytical Procedures:
• Suitable for large volume transactions
• Apply SA 520
2B. Test of Details (TOD):
• The nature of risk & assertion are relevant while designing TOD.
• Direction of testing for:
o Existence - Financial Records to support Evidence.
o Completeness - Supporting Evidence to Financial Records
3. Effect of Test of Controls:
• If TOC is unsatisfactory, increase extent of Substantive Procedure (SP)
• In TOD extent can be increased by increasing sample size & using more effective selection method.
4. External Confirmation:
• Shall consider whether external confirmation procedures should be performed.
5. Closing Process:
Auditor's substantive procedures shall include the following audit procedures:
(i) Examining material journal entries and other adjustments made during preparing FST
(ii)Agreeing or reconciling the financial statements & underlying records

(CNO-SA330.120) Factors to be considered while deciding whether to go for external confirmation.
Factors Affecting Use of EC: (Shortcut – “OK-A”)
• O - Objectivity of TP - If it is related
• to entity, EC will be less reliable

www.auditguru.in 4.27