Page 41 - CA Inter Audit PARAM

CA Ravi Taori
QNO— Sharing Elements of Planning With Management New Course – (SM25)
C2OC.065 Bhaskar CNO - C2OC.060
CA Kartik is planning for audit of a company engaged in manufacturing of cosmetics. Considering nature
of operations of the company, he had planned to include testing of controls of the company over
purchases, sales and inventories. One fine day, he reaches the corporate office and asks for manuals
and required documentation to ensure surprise element in testing. He had never shared with
management his intention to carry out above procedures. Is approach of CA Kartik proper?
Answer In the case, CA Kartik has reached office of the company without sharing with management his intention
to test the controls. The auditor may decide to discuss elements of planning with the entity’s
management to facilitate the conduct and management of the audit engagement without compromising
effectiveness of audit. Sharing details of visit to test controls does not compromise effectiveness of audit.
It is for the better facilitation and conduct of audit. Therefore, approach of CA Kartik is not proper.

QNO Audit Program (Significant Points) Old Course-(M18R/ M19R/N19E/ N22R/N22M)
C2OC.080 Bhaskar CNO C2OC.080 New Course-(M24E)
Explain the significant points auditor would consider while developing an audit programme.
OR
Arpan Hospitals Ltd having Gross Professional Charges of Rs 50 crores is engaged in providing
healthcare services. STP & Co., a firm of auditors is appointed as its auditors. Advise what special points
to be kept in mind for the purpose of construction of an Audit programme. Explain.
OR
State what special points you would keep in mind for the purpose of construction of an Audit
programme. Explain
OR
Discuss the points to be considered by auditor for the purpose of constructing an audit programme.
OR
While developing an audit programme, the auditor may conclude that relying on certain internal
controls is an effective and efficient way to conduct his audit. Explain stating clearly the points to be
kept in mind while developing an audit programme.
OR
XYZ & associates are appointed as the statutory auditors of Fisco Ltd. for the FY 2021 -22. While
constructing the audit programme, the engagement partner, CA X, should keep in mind various points.
List such points
OR
APR & Associates, a Chartered Accountant firm, are appointed as the auditors of Time Ltd. and Bakes
Ltd. The volume and nature of business of both the companies are entirely different. CA R is the
engagement partner for Bakes Ltd. CA P is the engagement partner for Time Ltd. CA R formulates an
Audit Programme for conducting the audit of Bakes Ltd. He suggests CA P to use the same audit
programme for Time Ltd. But CA P is of the opinion that this audit programme will not be useful for the
audit of Time Ltd. In light of the above, mention the matters that should generally be considered while
preparing an Audit Programme. Is CA P correct in emphasizing for a different Audit Programme for Time
Ltd.?
Answer For the purpose of programme construction, the following points should be kept in mind:

Stay within the scope and limitation of the assignment.
Prepare a written audit programme setting forth the procedures that are needed to
implement the audit plan.
Determine the evidence reasonably available and identify the best evidence for deriving the
necessary satisfaction
Apply only those steps and procedures which are useful in accomplishing the verification
purpose in the specific situation.
Include the audit objectives for each area and sufficient details which serve as a set of
instructions for the assistants involved in audit and help in controlling the proper execution
of the work.
Consider all possibilities of error
Co-ordinate the procedures to be applied to related items.
www.auditguru.in 2.11