Page 205 - CA Inter Audit PARAM

Ca Ravi Taori
the auditor’s conclusions and to reinforce the quality of the judgment. Such matters are
of particular interest to those responsible for reviewing audit documentation, including
those carrying out subsequent audits, when reviewing matters of continuing significance
(for example, when performing a retrospective review of accounting estimates).

➢ Examples of Professional Judgement:(SAF – Subjective, Authenticity, Factors)
Some examples of circumstances in which it is appropriate to prepare audit
documentation relating to the use of professional judgment include, where the matters
and judgments are significant:
• Subjective -The basis for the auditor’s conclusion on the reasonableness of areas
of subjective judgments(for example, the reasonableness of significant
accounting estimates). (SA 540)
• Authenticity -The basis for the auditor’s conclusions about the authenticity of a
document when further investigation (such as making appropriate use of an
expert or of confirmation procedures) is undertaken in response to conditions
identified during the audit that caused the auditor to believe that the document
may not be authentic. (SA 240)
• Factors -The rationale for the auditor’s conclusion when a requirement provides
that the auditor ‘shall consider’ certain information or factors, and that
consideration is significant in the context of the particular engagement. (SA 600
& SA 620)

QNO-- Examples of Significant Matters New Course – (S24R)
230.19.50 Bhaskar CNO – SA230.160

An important factor in determining the form, content and extent of audit documentation of significant
matters is the extent of professional judgment exercised in performing the work and evaluating the

results.
Explain stating clearly the examples of significant matters.
Answer As per SA 230,”Audit documentation” judging the significance of a matter requires an objective analysis of
the facts and circumstances.

Examples of significant matters include:

Matters that give rise to significant risks.
• Results of audit procedures indicating (a) that the financial statements could be materially
misstated, or (b) a need to revise the auditor’s previous assessment of the risks of material
misstatement and the auditor’s responses to those risks.

• Circumstances that cause the auditor significant difficulty in applying necessary audit procedures.

• Findings that could result in a modification to the audit opinion or the inclusion of an Emphasis of
Matter Paragraph in the auditor’s report.

An important factor in determining the form, content and extent of audit documentation of significant
matters is the extent of professional judgement exercised in performing the work and evaluating the
results.

Documentation of the professional judgements made, where significant, explains the auditor’s conclusions
and reinforces the quality of the judgement.
Such matters are of particular interest to those responsible for reviewing audit documentation, including
those carrying out subsequent audits, when reviewing matters of continuing significance (for example,
when performing a retrospective review of accounting estimates).

QNO-- Changes Within Prescribed Limit New Course – (J25M)
230.19.55 Bhaskar CNO – SA230.150

CA Tanuj, the auditor of Kiran Ltd., completed the audit work and issued the auditor's report on 18th
August 2024 for the financial year ended on 31st March 2024. During the final assembly of the audit file, he
discarded some supporting schedules as same were outdated and corrected cross referencing errors of

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