Specific Documentation Requirements in Various Standards on Auditing (SAs)

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The Standards on Auditing (SAs) provide for the specific documentation requirement in addition to the stipulations prescribed under SA 230, Audit Documentation. The standards on auditing are in alignment with the international standards on auditing prepared keeping in mind the requirements of the listed entities and public interest entities with a view to oversee the public interest, the specific documentation requirements have been given accordingly. The same may be adjusted (in case of small/ less complex entities as also briefed in the application material of the respective Standards) according to the requirements based on the size, nature, type of the entity being audited and complexities involved. The specific audit documentation requirements in the respective SAs are discussed in the story.

I. SA 220, Quality Control for an Audit of Financial Statements

a) Issue involved:

Compliance with the Relevant Ethical and independence Requirements
Acceptance and Continuance of client relationships and audit engagements
Consultations
Engagement Quality Control Review – Timing and Procedures

b) Documentation requirements:

Whether the auditor has documented the issues identified with respect to compliance with relevant ethical requirements and how they were resolved
Whether the auditor has documented the confirmation of independence and documenting the same
Whether the auditor has documented the conclusions on compliance with independence requirements that apply to the audit engagement, and any relevant discussions with the firm that support these conclusions
Whether the auditor has documented the conclusions reached regarding the acceptance and continuance of client relationships and audit engagements
Whether the auditor has documented the nature and scope of, and conclusions resulting from, consultations undertaken during the course of the audit engagement
Whether the engagement quality control reviewer has documented the procedures required by the firm’s policies on engagement quality control review have been performed; and activities performed with respect to this could be documented
Whether the engagement quality control reviewer has documented the engagement quality control review has been completed on or before the date of the auditor’s report
Whether the engagement quality control reviewer has documented the reviewer is not aware of any unresolved matters that would cause the reviewer to believe that the significant judgments the engagement team made and the conclusions they reached were not appropriate

This story discusses in detail the issue involved and the documentation required under various Standards of Auditing (SAs).

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