Page 99 - CA Inter Audit PARAM

CA Ravi Taori
• Re-computation of balances – reconstruction of trial balance from transaction data.
• Reperformance of mathematical calculations – depreciation, bank interest calculation.
• Analysis of Journal entries as required by SA 240.
• Fraud investigation.
• Evaluating impact of control Deficiencies.
Author’s Note

➢ Shortcut to remember uses of Data Analytics:
2
• (use of data analytics to detect C-A-R -D-S F-raud)

QNA Framework for Testing Internal financial control over financial Old Course -- (SM20/SM21)
AAE.50 reporting (IFCR) #Unique
The directors and management have primary responsibility of implementing and maintaining an effective
internal controls framework and auditors are expected to evaluate, validate and report on the design and

operating effectiveness of internal financial controls. Explain the framework which helps the auditors in
fulfilling this responsibility.
➢ The Guidance note on Audit of Internal Financial Controls over Financial Reporting issued by the
Institute of Chartered Accountants of India provides a framework that auditors should follow to fulfil
their responsibility.
➢ The below is a summary of this controls based audit approach :-

QNO Points to be considered (thought carefully) when you get certain findings & Old Course --
AAE.55 exceptions in IT systems Bhaskar CNO- AAE.250 (M21E/M22E/M23M)
Forceful Limited is a company dealing in mobile spare parts and having its showroom in almost all the
states in the country. For FY 2020-21, the company transferred its accounts from manual to computerized
system (SAP). PQR & Co, Chartered Accountants have specialization in the system audit and have been

appointed as the system auditor. PQR & Co, at the end of the audit concludes that there are certain
findings or exceptions in IT environment and IT controls of the company which needs to be assessed and
reported. Mention those points of consideration
Answer At the conclusion of each audit, it is possible that there will be certain findings or exceptions in IT
environment and IT controls of the company that need to be assessed and reported to relevant
stakeholders including management and those charged with governance viz., Board of directors, Audit
committee
Some points to consider are as follows:
Are there any weaknesses in IT controls?
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