CA Durgesh Kabra

CA Durgesh KabraAudit Reporting (which is on the basis of the Audit procedures and evidences) is governed by The Companies Act 2013 and relevant rules and standards notified by Central Government or agencies so appointed for the same.

As all of us are aware about the Standards on Auditing are applicable to the Auditor for establishing the concluding report on financial statements of the company.

  • Standards on Auditing are mandatory to be by followed by practitioners under the direction issued by the council of ICAI
  • As per the Section 143(9) of Companies Act-2013, Every auditor shall comply with the Standards on Auditing
  • Auditor violating Section 143 will be penalized as per Section 147(2) and 147(3) Unknowingly Minimum Rs. 25000 and Maximum Rs. 5 Lac or Knowingly/Willfully with the intention to deceive Imprisonment up to 1 year; and Minimum fine Rs. 1 lac Maximum fine Rs. 5 lac AND Refund remuneration Pay damages for losses suffered due to misleading statement in Audit Report.

As Auditor we have the following Powers:

  • Right to access books of accounts be it physical or electronic & vouchers of the company at all times
  • Right to ask for such information & explanation as he may consider necessary to enquire on the below matters:
    • Whether loans & advances made have been properly secured
    • Whether personal expenses have been charged to revenue account
    • Whether transactions of the Co. which are represented merely by book entries are prejudicial to the interests of the Co.
    • Whether loans and advances made by the company have been shown as deposits
    • Whether cash has actually been received for the shares allotted & if no cash has been received, whether the position as stated in the accounts is not misleading

Inspite of the above powers exercised satisfactory, due to less importance to working papers file on audit completion to be maintained by practicing unit it seems negligence on part of the practitioner. As the Audit period is in peak now to facilitate the audit documentation and various evidences required while conducting the Audit procedures hope the following checklist with reference to relevant Standards on Auditing will stand handy and useful to one and all.

The Standard on Auditing in relation to Documentation is SA 230 which is briefly described below in flowchart:

SA 230 – Documentation Audit Procedures & Audit Evidence SA 230

SA Description Required Documentations/ Analysis/Evidences Yes/ No/ NA Specific Remarks
SA 200   Specifies the requirement of Sufficient Appropriate Evidences to be obtained Relevant Papers Collection at each stage of Audit as necessary
SA 210  Agreeing with Audit Engagement Terms Audit Engagement Letter
SA 220 Quality Control for an Audit of Financial Statements Quality Control Policies and Procedures by Auditing Firms for Audit Plans, Personnel, etc.
SA 230 Audit Documentation (Most Important) – Audit programmes.- Analyses.- Issues memoranda.- Summaries of significant matters.

– Letters of confirmation and representation.

– Checklists.

– Correspondence (including e-mail) concerning significant matters.

 

The auditor may include abstracts or copies of the entity’s records (for example, significant and specific contracts and agreements) as part of audit documentation. Audit documentation, however, is not a substitute for the entity’s accounting records.

SA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements –          Industry specific Risk Identifying factors-          Documents on understanding of Internal Control Process-          Inquiries and communication with entity’s employees /management
SA 250 Consideration of Laws and Regulations in an Audit of Financial Statements List of Relevant Registration with various states, legislations along with responsible person’s inquiry, Checklist of Compliances for prevention and detection from non compliances
SA 260 Communication with those Charged with Governance Not necessarily required to be documented unless some specific considerations
SA 265 Communicating Deficiencies in Internal Control to those Charged with Governance and Management Obtaining reply for the same is required.
SA 299 Responsibility of Joint Auditors Clear bifurcation of scope and responsibility is to be done.
SA 300 Planning an Audit of Financial Statements Audit Strategy and Audit PlanUpdate Audit Plans as per need like unexpected events , changes in conditions, Before starting initial audit engagement – Client acceptance and previous auditor communications/correspondence
SA 315 Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and its Environment Factors, Operations, Ownership, Internal Control understanding, as well documenting.
SA 320 Materiality in Planning and Performing an Audit Selection of Samples , Quantitative and Qualitative factors for materiality
SA 330 The Auditor’s Responses to Assessed Risks Material misstatement addressed to management, test of controls for its effectiveness
SA 402 Audit Considerations Relating to an Entity Using a Service Organization Differs from Service to Service
SA 450 Evaluation of Misstatements Identified during the Audit Needs to be documented with proper evaluation and conclusion.
SA 500 Audit Evidence Reliability of relevant test of evidences, non conflict with other evidences on same matter
SA 501 Audit Evidence — Specific Considerations for Selected Items Reliability of relevant test of evidences, non conflict with other evidences on same matter
SA 505 External Confirmations Procedures for confirmation requests from related to third parties – For e.g. Bank, Receivable, Payable, Stock, Loans, Investment
SA 510 Initial Audit Engagements – Opening Balances Recent financial statements and previous auditor report
SA 520 Analytical Procedures Comparison of information for prior period, data reliability, significant fluctuations
SA 530 Audit Sampling The technical analysis for sample selection sustentative procedures, etc.
SA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures Management Representation Letter with appropriate assumptions made and its reasonableness
SA 550 Related Parties List of parties transactions entered, minutes books relevant details , Identifications of information provided by management transactions,
SA 560 Subsequent Events Adequate disclosure representation from those charged with governance
SA 570 Going Concern Relevant factors of sustainability
SA 580 Written Representations Specifying each and every item disclosed in balance sheet
SA 600 Using the work of Another Auditor Division of Responsibility
SA 610 Using the work of Internal Auditors Report and Summary of Internal Audit report
SA 620 Using the Work of an Auditor’s Expert Reliance and reliability of work performed
SA 700 Forming an Opinion and Reporting on Financial Statements details mailed earlier
SA 705 Modification to the opinion in the Independent Auditor’s Report details mailed earlier
SA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report details mailed earlier
SA 710 Comparative Information– Corresponding Figures and Comparative Financial Statements needs to be given and working paper e kept
SA 720 The Auditor’s Responsibility in Relation to Other Information in Documents containing Audited Financial Statements Financial and Non Financial Information required as per law regulation or custom (other than financial statements and auditor’s report) , Inconsistent information
SA 800 Special Considerations — Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks Engagement Letter, Purpose and Intended users, Steps to determine applicable framework by management,Factors having impact on information presented.Interpretation is significant when Adoption of Another reasonable Interpretation would have produced   a material difference   in the information   presented in the financial statementsExamples of special purpose frameworks are:

Cash Receipts and Disbursements – Cash Flow

Reporting provisions contained in Contract – like loan agreement, project grant or bond indenture

SA 805 Special Considerations– Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement Engagement Letter with clear scopeIdentifying factors of the matters to be reportedExamples:Single Financial Statement – only cash flow

Element – Account or Group including relevant notes (Account Receivable, Schedule of externally managed assets, etc.)

SA 810 Engagements to Report on Summary Financial Statements Agreement with management for understanding scope of audit of summary financial statements in event of non acceptance of such agreement this audit reporting shall not be takenEvaluation sheetManagement criteria and its acceptanceAudited Financial Statement

Comparative list of summary with complete set of financial statement

 Note: Sources various publications of ICAI, BCAS, WIRC

GENERAL LIST OF DOCUMENTS TO CHECK AND FILED IN AUDIT WORKING PAPER FILE:
SR NO PARTICULARS YES/NO/NA REMARKS
DIRECT TAX REPORTING
1 Copy Of Computation Of Income of Last Year    
2 Summary of Disallowances to be made and Allowances as per 43B    
3 Deferred Tax Working    
4 Form 26AS    
5 Advance Tax Payments Challans    
6 Invoice Of Addition To Fixed Assets    
7 Invoice Of Sale Of Fixed Assets    
8 TDS Payments Challans    
9 Cash Ledger With Transaction More Than Rs. 20000/-    
10 Status Of Pending Income Tax Assessement    
11 Certificate Under Sec. 40(A)(3) & 269SS & 269T Of Income Tax    
12 List of Parties covered under 40 A 2(b) with relation and transactions    
13 TDS details as per Clause 34    
14 Quantitative Details    
INDIRECT TAX – VAT/EXCISE/ST/CUSTOM
15 Applicability of VAT/CST    
16 Applicability of Excise    
17 Applicability of ST    
18 Applicability of Customs    
18 Respective Returns Copy    
19 Respective Challans Copy    
20 Respective Order Status, if any    
21 Reconciliation Statement of Turnover declared and booked, wherever required    
COMPANY LAW
21 Shareholding Pattern    
22 List Of Directors    
23 List Of KMP    
24 Register Extracts of Transactions with related parties    
25 Minutes Of Meeting    
26 Fixed Assets Register    
27 List Of Related Party As Per As18    
28 Ledger Of Related Party From Tally Having Transaction    
29 Calculation Of Foreign Exchange Profit/Loss    
30 Representation From Director For Qualification    
31 Any Change In MOA/AOA  
32 Copy Of Annual Return Filled With MCA  
33 Calculation Of Director Remuneration As Per Companies Act  
         Checklist as provided below as per CA, 2013  
34 CSR – Applicability and Its Compliances  
35 Cash Flow Statement by other than Small and One Person Company  
36 Consolidated Financial Statement preparation applicable  
37 Internal Financial Controls policy and monitoring process  
38 Schedule II – Depreciation Useful life if not the same technical report  
39 KMP appointment and its compliances  
40 Directorship List – Appointment or Disqualification if any  
41 Independent Director and/or Women Director  
42 Deposits repayment other than Directors  
43 Annual return Extracts – MGT 9  
44 Number of meetings by BOD (OM, EOM,BM) and its minutes  
45 Vigil Mechanism  
46 List of Contracts or Arrangements with Related Party  
47 Various Committees to be Formed  
48 Interest by directors  
49 Various Forms filed with ROC  
50 Corporate Governance  
51 Secretarial Audit Requirement or Compliance Certificate from Practicing CS  
COMPLIANCE IN OTHER ALLIED LAWS
52 PF Payment Challans and Returns copy, if any    
53 Profession Tax Payment Challans and Returns copy, if any    
54 ESIC Payment Challans and Returns copy, if any    
55 LWF Payment Challans and Returns copy, if any    
56 SEBI compliances    
MISCELLANEOUS – OTHERS
57 Audit Engagement Letter(With Reference to SA 210)
58 Opening and Closing Trail Balance
59 Last Year Signed Financial Statement
60 List of Various Registration Obtained in other laws
61 List of Branches
62 List and place of books maintained
63 Loan Payment Sch. & Loan Confirmation Letter
64 Cash Balance Confirmation Letter Along With Denomination
65 Bank Balance Confirmation
66 Outstanding Entry Passed – Provide Supporting Xerox Copy
67 Draft Financial Statement
68 Management Representation Letter

(Author can be reached at durgeshkabra@gmail.com)

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Tags : Audit (435) CA Durgesh Kabra (13) Companies Act (2033) Companies Act 2013 (1805)

0 responses to “General Checklist Of Audit Analysis/ Documentations/Evidences”

  1. Purushotham says:

    Thank for your information

  2. Pabitra Jena says:

    Thanks for sharing such an usuful data. ” Cream of Auditing”.

  3. Naveen says:

    Very Very Useful article……

  4. Karthik K says:

    Thank you for this great article

    regards,
    Karthik. K

  5. Ashok says:

    Very useful and informative article. Keep going.

  6. Ravi Ladia says:

    Thank you for this wonderful article

  7. SUNDARAMOORTHY says:

    Informative file sir

    Thanks for your sharing.

    Regards,

    A.S.Moorthy

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