Title Page

  • Conducted on

  • Review by

  • Name of Client

  • Nature of Assignment

  • Assurance Partner

  • Team Leader

  • Location
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Quality Control, Ethical Requirements and Independence

  • 1. Does the system of quality control include policies and procedures addressing each of the following elements:

  • a) Purpose of Engagement

  • b) Ethical requirements

  • c) Acceptance and continuance of client relationships and specific Engagements

  • d) Human resources

  • e) Engagement performance

  • f) Monitoring

  • 2. Does each engagement document adequately cover the following common elements?

  • (a) An introduction explaining that the purpose of the engagement document is to confirm the member’s understanding of the terms of the engagement?

  • (b) The request for the client to confirm the terms of the engagement by acknowledging receipt of the engagement document?

  • (c) The scope of the engagement, including the period of appointment and time schedules, the applicability of any legislation and professional standards relevant to the engagement, information required of the client or any other pertinent matter?

  • (d) For taxation audit engagements, a description of the self-assessment rules (e.g. substantiation audits, reasonable care) which informs clients of their responsibilities and the penalties relating to any tax shortfall?

  • (e) For taxation audit engagements, a statement in writing that the responsibility for the accuracy and completeness of the particulars and information provided by the client rests with the client. That any advice given to the client is only an opinion based on your knowledge of the client’s particular circumstances. Finally, that a taxpayer has obligations under self assessment to keep full and proper records in order to facilitate the preparation of accurate returns.

  • (f) For compilation engagements, a reference to an appropriate disclaimer of liability and the limitations of the engagement?

  • (g) The client’s responsibility for the completeness and accuracy of the financial information/report?

  • (h) For audit engagements, the objective of the audit, the scope of the audit and an explanation as to the extent to which an audit can be relied on to detect material misstatements?

Conflict of Interest

  • Does the engagment / service will lead to conflict of interest of any nature?[Standard on Quality Control (SQC) 1] Please explain

  • Management representation Letter (MRL) : Whether MRL obtained from client?

NOC from Previous Auditors

  • In case of New client whether NOC from previous auditors obtained?

Expert Opinion (SA 220)

  • Any consultation/ seeking experts opinion on any contentious matters?

Use of Checklists

  • Review the checklists, manual, working papers, etc. Used for audit to ensure consistency of the quality of each assignment and for providing guidance to new or junior staff.

  • Whether the checklist manual used is updated on timely basis ?

Unusual Issues

  • Any unusual issues that were not covered in the Check List or standard working papers? List out such issues. How the issues have been dealt with?

Working Papers :

  • Whether working papers have been maintained and reviewed by TeamLeader? Explain the system of maintaining working papers.

Updation / intimation of changes in policies, statutes, other Information :

  • List of major changes in policies, amendmentds to any statutes which are relevant to the Client to keep track of changes that take place from time to time to avoid submission of misleading information to any authority or its client. Does such changes have been intimated to the client?

Audit Strategy (SA300)

  • Whether audit strategy has been prepared considering general understanding of the applicable financial reporting framework, and the legal and regulatory framework applicable to the entity?

  • Whether the audit strategy has been designed to provide an understanding of whether the entity’s selection and application of accounting policies are appropriate for its business including their internal controls and consistent with the applicable financial reporting framework and accounting policies used in the relevant industry?

Audit Plan (SA300) :

  • Does the audit plan includes, at a minimum, a description of the nature, timing and extent of planned risk assessment procedures as well as further audit procedures at the assertion level?

Risk Assessment (SA 315 and300,320,330)

  • Whether the following risk assessment procedures have been conducted to provide a basis for the identification and assessment of risks of material misstatement at the financial report and assertion levels:

  • (a)Inquiries of management and others within the entity;

  • (b)Analytical procedures; and

  • (c)Observation and inspection?

Risk Assessment (Ref SA 315 ,320, 300, 330)

  • Whether the understanding of control activities necessary to assess the risks of material misstatement at the assertion level and design further audit procedures responsive to assessed risks?

  • And where applicable, have there been discussions within the team regarding the susceptibility of the financial reports to material misstatement?

  • Does the audit plan include identified and assessed risks of material misstatement, whether due to fraud or error, based on an understanding of the entity and its environment?

Documentation of Risk Assessment ( Ref SA 315)

  • Whether the risks of material misstatement at the financial report level, and at the assertion level for classes of transactions, account balances, and disclosures have been identified and assessed to provide a basis for designing and performing further audit procedures and documented these risks?

  • As part of the risk assessment and based on our judgement whether any of the risks identified are significant risks ? ( Ref SA315,330)

Audit Plan - Supervision of Audit Team [SA300]

  • Does the audit plan outline the nature, timing and extent of direction and supervision of engagement team members and the review of their work?

Use of information obtained from previous experience with the entity and from previous audits : (SA 300)

  • Where the information obtained from previous experience with the entity and from previous audits to determine whether changes had occurred since the previous audit that may have affected its relevance to the current audit?

Risk associated with Related Party transactions [ SA 550]

  • Whether conducted audit procedures and related activities to obtain information relevant to identifying the risks of material misstatement associated with related party relationships and transactions?

  • Is there any instance of existence of related party relationships or transactions that management has not previously identified or disclosed but observed during the course of audit? List out instances . How such matter has been dealt with?

Using Work of an Expert [SA 620 ]

  • If expertise in a field other than accounting or auditing is necessary to obtain sufficient audit evidence, whether using the work of an expert, including the work of an actuary has been considered?

  • whether the expert has the necessary competence, capabilities and objectivity for the audit purposes?

  • Whether the adequacy of the expert’s work for the audit purposes?

Relying on work of component\branch auditor [SA 600]

  • Where a component\branch auditor has performed work, whether obtained sufficient understanding of, among other things, the capabilities, competence and independence of that component/ branch auditor?

Relying on work of internal auditors [SA 610]

  • As the external\Statutory auditor, whether the work of the internal auditors has an effect on the external\Statutory audit procedures to assess the reliability?

Going Concern Issues: (SA570)

  • In performing risk assessment procedures to understand the entity and its environment, whether audit considered whether there are events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern?

  • In the case of any identified events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern, whether sufficient appropriate audit evidences have been obtained to determine material uncertainty exists through performing additional audit procedures, including consideration of mitigating factors?

Audit Sampling and other selective Audit Procedures

Audit Sampling, Audit Procedure (SA330, 500, 530)

  • Whether audit plan designed and performed further audit procedures whose nature, timing, and extent are based on and are responsive to the assessed risks of material misstatement at the assertion level?

  • Whether audit plan designed and performed tests of controls to obtain sufficient appropriate audit evidence as to the operating effectiveness of relevant controls where in the design of tests of control and tests of details, has the PU determined appropriate means of selecting items for testing that are effective in meeting the purpose of the audit procedure? (Ref SA 500, SA 530) . Examples include :

  • (i) selecting all items (100% examination);

  • (ii)selecting specific items; and

  • (iii)audit sampling.

When undertaking an audit sample, did you:

  • (i)determine a sample size sufficient to reduce sampling risk to an acceptably low level? (SA 530)

  • ii. select items for the sample in such a way that each sampling unit in the population had a chance of selection?(SA 530)

Substantive procedure (SA 330 and SA 520 ,SA 320 & 315)

  • Whether designed and performed appropriate substantive procedures for each material class of transactions, account balance, and disclosure?

Whether substantive procedure include the following audit procedures related to the financial report closing process

  • (i)agreeing or reconciling the financial report with the underlying accounting records; and examining material journal entries and other adjustments made during the course of preparing the financial report?

Materiality (SA320, SA450)

  • Have you determined materiality for the report as a whole, and if applicable classes of transactions, balances and disclosures (SA 320); and performance materiality for the purpose of assessing the risks of material misstatement and determining the nature, timing and extent of further audit procedures?

  • Any instance of management refused to correct some or all of the misstatements communicated ?

  • Have you determine whether such uncorrected misstatements were material, individually or in aggregate? (SA450)

  • Have you evaluated whether the financial report as a whole was free from material misstatement? (SA450)

Discussion with the Management (SA230)

  • Whether documented discussions of significant matters with management, those charged with governance, and others, including the nature of the significant matters discussed and when and with whom the discussion took place? (SA230)

  • Any instances of issues where management information has been identified that is inconsistent with the audit final conclusion regarding a significant matter? (SA 230)

  • How such inconsistencies addressed?

  • Have you prepared documentation that provides a sufficient and appropriate record of the basis for the auditor’s report and evidence that the audit was planned and performed in accordance with Auditing Standards and applicable legal and regulatory requirements? (SA 230) - Explain..

Have you prepared audit documentation

  • (i) on a timely basis; and (SA 230)

  • (ii) that is inadequate which would result in an experienced auditor being unable to understand: (SA 230)

  • Additions/ modification of Audit Documents : (SA230) When existing audit documentation has been modified, or new audit documentation has been added after the assembly of the final audit file has been completed, regardless of the nature of the modifications or additions, have you documented: (i) the specific reasons for making them; and (ii) when and by whom they were made and reviewed?

Retention and retrievability of Audit documentation : (SA 230,200)

  • What is the procedures for maintaining the confidentiality, safe custody, integrity, accessibility and retrievability of the audit documentation and the needs of the practice in accordance with legal requirements of record retention?

External Confirmation : [ SA 500,501,505 ]

  • whether external confirmation procedures performed as substantive audit procedures?

  • Have you maintained control over external confirmation requests, ensuring that, among other things, return information for responses are sent directly to the auditors? (SA 505]

Risk of material misstatement - Claims / Litigations [SA501]

  • Whether Audit plan / Check-list designed and performed audit procedures in order to identify litigation and claims involving the entity which may give rise to a risk of material misstatement.

Risk of material misstatement - Opening Balances [SA510]

  • For initial audit engagements, have you obtained sufficient appropriate audit evidence about whether the opening balances contain misstatements that materially affect the current period’s financial report?

Accounting Estimates: (SA540)

  • Have you obtained an understanding of the following in order to provide a basis for the identification and assessment of the risks of material misstatement for accounting estimates:

  • (i) the requirements of the applicable financial reporting framework relevant to accounting estimates, including related disclosures;

  • (ii) how management identifies those transactions, events and conditions that may give rise to the need for accounting estimates to be recognised or disclosed in the financial report, and

  • (iii) how management makes the accounting estimates, and an understanding of the data on which they are based?

Comparative Information (SA710)

  • whether the financial report includes the comparative information required by the applicable financial reporting framework and whether such information is appropriately classified?

Internal Control Issues (SA 265)

  • Have you communicated in writing any significant deficiencies in internal control identified during the audit to those charged with governance and, where appropriate, to management, on a timely basis?

Client using services of ‘service providers’ (SA 402)

  • Have you obtained an understanding of the services provided by a service organization to the client, and evaluated the design and implementation of the client’s internal control relating to these services?

  • Reviewer Signature

  • Assurance Partner Signature

  • Team Leader signature

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