Page 207 - CA Inter Audit PARAM

Ca Ravi Taori
• Documents must have come into possession of the auditor on the authority of the client;
• The auditor can retain the documents only if he has done work on the documents assigned to him;
• Such documents can be retained which are connected with the work on which fees have not been
paid.

➢ Books should be kept at registered, office / So it is impractical for auditor to keep
possession / Company has to allow access to auditor / directors / authorised persons.
Under section 128 of the Act, books of account of a company must be kept at the registered office.
These provisions ordinarily make it impracticable for the auditor to have possession of the books and
documents. The company provides reasonable facility to auditor for inspection of the books of
account by directors and others authorised to inspect under the Act.

➢ Conclusion
Taking an overall view of the matter, it seems to be correct that though legally, auditor may exercise
right of lien in cases of companies, it is mostly impracticable for legal and practicable constraints.

QNO-- Documentation -- Matters Arising After Date of Audit Old Course – (N22R)
230.40 Report Bhaskar CNO SA230.120
CA R comes to know some very critical information with regards to the business cycle of an entity for
which he has issued the audit report, which become known to him as an auditor after the date of the
auditor’s report but which existed at that date and which, if known at that date, might have caused the

financial statements to be amended or the auditor to modify the opinion in the auditor’s report. He wants
to perform additional audit procedures to satisfy himself. As an auditor what he shall document, on the
matters arising after the date of audit report?
Answer As per SA 230, “Audit Documentation”, if, in exceptional circumstances, the auditor performs new or
additional audit procedures or draws new conclusions after the date of the auditor’s report, the auditor shall
document:
(i) The circumstances encountered;
(ii) The new or additional audit procedures performed, audit evidence obtained, and conclusions reached,
and their effect on the auditor’s report; and
(iii) When and by whom the resulting changes to audit documentation were made and reviewed.

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