Page 201 - CA Inter Audit PARAM

Ca Ravi Taori
gets a call from CFO of the company to share complete audit file so that financial reporting of company
can be improved upon in coming periods. Is it mandatory for statutory auditors to share audit files with
client? What are the requirements for making audit documentation available to clients?
Or
Should branch auditor of a company comply with the request of the principal auditor of the company to
give photocopy of the working papers pertaining to the branch audit? Explain.
Or
The working papers of the branch auditor are also the property of the Principal Auditor and the
Management of the Company, so they have right to access them. State the relevant SA and comment.
Answer Standard on Quality Control 1 (SQC 1),“Quality Control for Firms that Perform Audits and Reviews of
Historical Financial Information, and Other Assurance and Related Services Engagements”, provides that,
unless otherwise specified by law or regulation, audit documentation is the property of the auditor.
Therefore, it is not mandatory for CA N to share audit file with client.

He may at his discretion, make portions of, or extracts from, audit documentation available to clients,
provided such disclosure does not undermine the validity of the work performed, or, in the case of assurance
engagements, the independence of the auditor or of his personnel.

QNO-- Factor affecting - Form / Content / Extent Old Course - (P16M/N18E/M19R/M19M)
230.13 Bhaskar CNO SA230.100 New Course - (SM25)
Discuss with reference to SA-230, factors affecting form, contents and extent of audit documentation.
OR
State the factors affecting form, content and extent of working papers.
Answer ➢ The form, content and extent of audit documentation depend on factors such as:
• The size and complexity of the entity. (↑Size ↑Extent, ↑Complexity ↑ Extent)
• The identified risks of material misstatement. (↑Risk ↑Extent)
• The nature of the audit procedures to be performed. (Test of controls→Flow Charts
Content / Analytical Procedures→ Graphs & Ratios)
• The audit methodology and tools used. (Manual Inspection of Records→Physical Form /
CAAT→Electronic Form)
• The significance of the audit evidence obtained. (High Court Order of
Amalgamation→Photocopy Document Form / Regular Purchase Order→Inspection +
recorded PO number)
• The nature and extent of exceptions identified. (fraud + material→Extent ↑ / error +
material→Extent ↓)
• The need to document a conclusion or the basis for a conclusion not readily determinable
from the documentation of the work performed or audit evidence obtained.(Complex
working→Detailed Calculation will be covered in content / Simple→ Only references will be
given in content)
Author’s Note

The above points are in the flow of audit process:
As auditor reaches premises of client, he will know size &idea of complexity→ Risk Assessment→
Audit Procedures→ Audit Methodology→ Significance of Audit Evidence→ Exceptions→ Basis of
Conclusion

QNO— Not Assembling Audit File In Timely Manner New Course – (SM25/M24R/J25R)
230.13.50 Bhaskar CNO - SA230.110 / SA230.120

CA Sonali Morarka has completed audit of a listed company. The audit report dated 15th July, 2022 has
been issued. However, audit working papers including record of discussions with management, details
of audit procedures performed to obtain audit evidence and conclusions reached by her have not been
properly assembled. More than six months have elapsed after issue of audit report. Subsequently, she
has received a letter from regulator in connection with audit of the company requesting her to share
copy of audit file. The letter has woken up her from deep slumber. She hurriedly assembled audit file
and inserted some more papers which were necessary. However, she put current date on these

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