SA -220 QUALITY CONTROL

AUDITOR- 1

st

AUDITOR 2

Auditors are in partnership firm

nd

Sa 330, Direct & supervise the article work

First of all Auditor’s engagement done After received engagement letter

Do planning Article appoint ,so team of Audit

Review of Quality check of Engagement Team

in

Engagement team, Engagement Partner +Articles If, Yes , then Sign report

TEAM -1

Same opinion Sign Now

Resolve

If Dispute

TEAM-2

ENAGAGEMENT TEAM IF YES, OK

SIGN AUDIT REPORT

Do ,Perform the work and in this REVIEW THE WORK IF SOME DESCRIPENICES

SOLVE IT &

PROCESS OF REVIEWING THE QUALITY OF WORK PERFORME BY ENGAGE TEAM & PARTNER

Responsibility of Auditor

YES, WE DO THIS, THEN CHECK

Ethical requirement complied OK

BY- PARDEEP ROHILLA 98125-98398,89015-98398

x not complied then Action taken

Page 1

SA 230 AUDIT DOCUMENTATION Necessary for audit opinion

Necessary to show the compliance of Standard of Audit (SA’s)

OPTAIN DOCUMENTS(Mean evidence & other) Do

SUBSTANTIVE PROCEDURES

EVALUATE

COMPLIANCE PROCEDURES

?

SA 210 (review)

CONCLUSION

QUALIFY

MATCH

Documentation this fact also for

SAME

NOTE SAME

STOCK IS ACCURATE

QUALIFY THE REPORT

Some matter found mean event found after Bal. Sheet (AS-4) + SA- 560(Subsequent events) Note the subsequent event Action

Audit report do

BY- PARDEEP ROHILLA 98125-98398,89015-98398

Page 2

SA 500 AUDIT EVIDENCES EVIDENCES Reliable

Not reliable

(written , direct and from outside etc) Analyse Evidence

Evaluation

match with item

Conclusion on particulars items. All conclusion with respective evidence are clubbed Overall opinion is drown

Evidence are in agreement with item (Yes)

NO

OK

INCONSISTENCY NATURE TIME EXTENT (NTE), DO INCREASE THEN CHECK IF

REMOVED

NOT REMOVED THEN

OK, VERY GOOD

BY- PARDEEP ROHILLA 98125-98398,89015-98398

QUALIFIED THE AUDIT REPORT

Page 3

SA -520 ARP (ANALYTICAL REVIEW PROCEDURES) FOR EXAMPLECURRENT YEAR Commission

45000

P.YEAR

CHANGE

20000

25000

Compare to sales

% CHANGE 125%

Suppose sale increase 20%

ARP % ratio/trend compute

here base are Sale

Compare with base ratio /trend

Yes, fluctuation

Not, fluctuation ok

It is usual

it is unusual

Ok, mean its normal

so, there are indicator that may be fraud & - Error (mean higher degree of risk may be)

Investigation (NTE increase)

If confirm fraud & error

Qualify the report

BY- PARDEEP ROHILLA 98125-98398,89015-98398

if not confirm

ok, very good

Page 4

SA-260 COMMUNICATION WITH THOSE CHARGED WITH GOVERNANCE

SCOPE What to communicate ,

Auditor’ responsibility(expression opinion

+ Management is not relived for his responsibility + Do planning & timing + if finding any matter during the audit

How to communicate Must be in written Must be timely based feedback

OTHER MATTERS : i.eIndependence

Sub. Group*

communication to the

Management

TCWG

In small business they are same So, one communication is sufficient

Documentation

BY- PARDEEP ROHILLA 98125-98398,89015-98398

Page 5

SA -265 COMMUNICATING DEFICIENCIES IN INTERNAL CONTROL TO THOSE CHARGED WITH GOVERNANCE AND MANAGEMENT SA-300 Call for plan + SA 315 for risk assessment

Accounting System

Internal Control System (ICS)

These are not discuss in this SA

Review

HIGH RISK

LOW RISK

Substansive test

t ak e

Compliance test SA -330 INTERNAL CONTROL MANNUAL (Mean-Design)

APPROPIATE

NOT APPROPIATE

Is this in operation?

Yes, then OK

Check Weakness in Financial area

N ot

Y E S, me an it may af f e c t F. S IF MATERIAL

NOT MATERIAL

Then do communicate to

HOW TO COMMUNICATE

Management

Written

NOT

Leave it

TCWG

Unless they are involved

Timely manner Detailed What type of weakness How it can affect F.statement

BY- PARDEEP ROHILLA 98125-98398,89015-98398

Page 6

SA-600 -, USING OF WORK OF ANOTHER AUDITOR CLIENT (Which’s audit are doing) PRINCIPLE AUDITOR

Client’s auditor called

Subsidiary

Branch

Partnership firm

All’s auditor

Associated etc

Component Auditor/Other Auditor Check

Skill + Check liquidation on scope of component Auditor Finding

y et

Discuss Questioner can do with component Auditor y et Work performed by component Auditor Complete

Not complete

OK This is check himself by Principle Auditor

COMPONENT AUDITOR

Checks from another Auditor

GIVE

Clean Audit Report

Modified Consider this What the company Audit report required to be modified

Y ES Reason is material

BY- PARDEEP ROHILLA 98125-98398,89015-98398

NO Reason is not material

Page 7

SA-610 USE WORKS OF INTERNAL AUDITOR Principle Auditor

1. Internal Auditor

Can use the work of Internal-

directly

- control auditor for SA 315

Assistant in company Audit 2. Working paper to Internal Auditor

SA-530 (AUDIT SAMPLING) Definition – most important in this SA Population (Item) Sample Size Audit Procedure Deviation

Not deviation material ok

not material Population/item

Aggregate with other deviation

Wrong/incorrect Qualified

if material

not material

Qualified the report

leave it

BY- PARDEEP ROHILLA 98125-98398,89015-98398

SA 320

Page 8

SA-510 (INTERNAL AUDIT ENGAGEMENT) You r doing audit of a particulars company 1st time

In P. year audit was not done

Must be check Op. Balance of C.Y= Closing bal. of P.Y

if not

Ask the reason from management If as per AS-5 per item

If Yes OK

OK

N OT OK Qualified report

A/c ing policy of P.Y= C.Y a/c ing policy

if not

Ask the reason from management

If Yes OK

Change in law

AS revised

Better Representation

AS-1

If the above these reason Y ES

NO

AS-5 (Retrospective Effects)

Qualified Report

Yes

No

OK

Qualified Report Here Low risk CLEAN (True& fair)

Take previous year Audit report MODIFIED

OK Here May be high risk

Ask the reason Ask to management whether the discrepancy has been resolved IF Y ES

NO

Give Clean Report

Check Effect on Current year Financial Statement Yes

Do Qualified Report

BY- PARDEEP ROHILLA 98125-98398,89015-98398

No

Leave it

Page 9

SA -540 (ESTIMATION) ACCOUNTING ESTIMATE

OTHER ESTIMATE

(i.e. - Rate of dep., Provision etc ) IT IS Responsibility of Management

AUDITOR RESPONSIBILITY

Take Items

Check

Analyse these items

FFS are allowed do

Decide Range (For e.g. - Dep. In 15 to 20 year) Yet outcome is determined (i.e. – Dep. do 17%)

whether need or not Adequacy or Reasonableness

Analyse of item self Compare

Decide Range

if Match

Outcome not match (mean difference)

Satisfied

Fair + Disclosure

Ask to the Person

I f Y es

may be

OK

Appropriate evidences are gets

not get

then Qualify the report

Take Written Representation from Management (SA-580)

BY- PARDEEP ROHILLA 98125-98398,89015-98398

Page 10

SA 620{Revised} USING THE WORK OF AN AUDITOR’S EXPERT EXPERT Management Expert

Auditor’s Expert

For

For

Problem related to prepare of F.S

For

Problem relates to Audit & A/c ing

This SA not applicable here

Other Problems(i.e –valuation)

This SA not applicable here

Yes applicable this SA

But using other Expert’s opinion never finishes /decreases Auditor’s responsibility In Expert

check Skill, Competence & Independently

but before doing this work

Discuss to this for field/work

+

Agreement between Auditor and Expert After this Work is performed by Expert

Now Auditor Review As per Expert Opinion (For eg. Plant is Rs.2 lakh) But Management say Plant value is Rs. 3.5 lakh

Difference

After review this, Auditor ask to the Management for Difference

REVIEW Yes, consistency

Not, consistency

Give clean report

Qualified the report

Ok

Use the name of Expert (consent of Expert compulsory)

No require Expert’s reference

BY- PARDEEP ROHILLA 98125-98398,89015-98398

Page 11

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