Page 88 - CA Inter Bhaskar Vol 1

RISK ASSESSMENT AND INTERNAL CONTROL CA RAVI TAORI

Assessment of
Representation (Info) by Mgt. in FST
Risks of
Material Examined by auditor for potential misstatements
Misstatement
at the Explicit Implicit
Assertion Level
Directly/Clearly AUDIT BHASKAR CH 03 - PART 01
(QNO-315.17/ Not Directly written but
stated in FST
315.19) generally assumed
or understood.
(MCQ-315.24, Positive Negative
Incs.19.4,
Account Balance (Assets & Liabilities)
Incs.44.1,
Balance sheet
44.2, 44.4) Existence
Completeness
Land &
Building 100 Cr. Valuation
Rights & Obligation

Transactions (Income/Expenses/Inflow/Outflows)
Profit & Loss A/c Occurrence
Completeness
Sales 1000 Cr.
Accurate / measurment
Classification
Cut-off
Presentation & Disclosure (Notes to Accounts)
Occurrence & Rights & Obligations
Lease Rent Completeness
of In Next 5 years. 20 Cr Accuracy & Valuation
Classification/Understanding

OTHER POINTS RELATED TO ASSERTION

Shortcut- DON points
D Assertions may be expressed Differently by some auditors

For example

They may change ways, In case of audit of govt. related
assertions are presented entities they may add new assertions

Far example they may add assertion
They may combine
that transactions are as per
assertions of T/B/D
legislation & proper authority
O Overall Assertion
Each FST gives some overall information about the entity.
For e.g. P&L gives info. about overall financial performance
& B/S about overall financial position

st
Auditor has to 1 examine specific assertions which are related to
financial items such as TBD

After this he can formulate opinion about overall assertions of FST
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