Page 216 - CA Inter Audit PARAM

CA Ravi Taori
• Auditor should examine whether all adjusting events should be identified
The auditor shall perform audit procedures designed to obtain sufficient appropriate audit
evidence that all events occurring between the date of the financial statements and the date of
the auditor’s report that require adjustment of, or disclosure in, the financial statements have
been identified. The auditor shall perform the procedures so that they cover the period from the
date of the financial statements to the date of the auditor’s report, or as near as practicable
thereto.
• No need to check again is some areas are checked in regular audit procedures
The auditor is not, however, expected to perform additional audit procedures on matters to
which previously applied audit procedures have provided satisfactory conclusions.

• Nature and extent depends on risk assessment
The auditor shall take into account the auditor’s risk assessment in determining the nature and
extent of such audit procedures, which shall include the following:

➢ Audit Procedures
Understanding procedures, controls set by Mgt / Inquiry with Mgt, TCWG / Reading minutes
/ Latest subsequent interim financial statements/ / Read latest budgets, cash flow
forecasts and other management reports for periods after the date of the FST / oral or
written inquiries concerning litigation and claims

Detailed Text
• Obtaining an understanding of any procedures management has established to ensure that
subsequent events are identified.

• Inquiring of management and, where appropriate, those charged with governance as to whether
any subsequent events have occurred which might affect the financial statements.

• Reading minutes, if any, of the meetings, of the entity’s owners, management and those charged
with governance, that have been held after the date of the financial statements and inquiring
about matters discussed at any such meetings for which minutes are not yet available.
• Reading the entity’s latest subsequent interim financial statements, if any.
• Read the entity’s latest available budgets, cash flow forecasts and other related management
reports for periods after the date of the financial statements.
• Inquire, or extend previous oral or written inquiries, of the entity’s legal counsel concerning
litigation and claims

➢ Adjusting Event
If auditor identifies event requiring adjustment / see whether it is adjusted or disclosed
in FST / if not then modify the report.

Detailed Text
• When, as a result of the procedures performed as explained above, the auditor identifies events
that require adjustment of, or disclosure in, the financial statements, the auditor shall determine
whether each such event is appropriately reflected in those financial statements. .If such events
have not been considered by the management and which in the opinion of the auditor are
material, the auditor shall modify his report accordingly.

➢ Written Representations
The auditor shall request management and, where appropriate, those charged with governance, to
provide a written representation in accordance with SA 580, “Written Representations” that all events
occurring subsequent to the date of the financial statements and for which the applicable financial
reporting framework requires adjustment or disclosure have been adjusted or disclosed.

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