Page 37 - CA Inter Audit PARAM

CA Ravi Taori

Significant Changes
A record of the significant changes to the overall audit strategy and the audit plan, and
resulting changes to the planned nature, timing and extend to f audit procedures,
explains whythesignificant changes were made,and the overall strategy and audit plan
finally adopted for the audit.It also reflects the appropriate response to the significant
changes occurring during the audit.

QNO— Planning Inquiry of Inhouse Legal Counsel New Course – (SM25)
300.27.50 Bhaskar CNO - SA300.080
CA Mary, while planning audit of a company, feels that she would inquire from inhouse legal
counsel of the company status of pending litigation matters against the company to identify and
assess risks of material misstatements. Considering above description, are you able to identify said
procedures? Where these identified procedures are included in planning in accordance with SA-
300?
Answer The auditor shall develop an audit plan that shall include a description of:
• The nature, timing and extent of planned risk assessment procedures, as determined under SA
315 “Identifying and Assessing the Risks of Material Misstatement through Understanding the
Entity and Its Environment”.
• The nature, timing and extent of planned further audit procedures at the assertion level, as
determined under SA 330 “The Auditor's Responses to Assessed Risks”.
• Other planned audit procedures that are required to be carried out so that the engagement
complies with SAs,

The above procedures used by CA Mary are planned risk assessment procedures to identify and assess
risk of material misstatement. The objective of planned inquiry of inhouse legal counsel is to identify and
assess risk of material misstatement arising from pending litigation matters. Such planned risk
assessment procedures are included in audit plan in accordance with SA-300.

QNO Planning for DSR Old course – (M20M/N20R/N21R/ SM17/SM20/SM21/N22R)
300.29 Bhaskar CNO SA300.120 New Course – (SM25/J25R)

The nature, timing and extent of the direction and supervision of engagement team members and review
of their work vary depending on many factors. Explain.
OR
"The auditor shall plan the nature, timing and extent of direction and supervision of engagement team
members and the review of their work. Explain the factors due to which above varies"
Answer ➢ The auditor shall plan the nature, timing and extent of direction and supervision of engagement
team members and the review of their work.
➢ The nature, timing and extent of the direction and supervision of engagement team members and
review of their work vary depending on many factors, including
The size and complexity of the entity.
The area of the audit.
The assessed risks of material misstatement

• Example:
An increase in the assessed risk of material misstatement for a given area of the audit
ordinarily requires a corresponding increase in the extent and timeliness of direction and
supervision of engagement team members, and a more detailed review of their work.

The capabilities and competence of the individual team members performing the audit
work.
• Example:
o We may have identified a problem related to the production process that raised
concerns about inventory obsolescence.
o After obtaining an understanding of the entity’s process that raised concerns about
inventory obsolescence (which we had identified as a significant class of

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