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Maha mantras for Standards- Reporting & Important instances of Interlinking in Standards
Situation
SAAE available- Auditor concludes
misstatement is material and pervasive
SAAE available- Auditor concludes
misstatement is material but not pervasive
Unable to obtain evidence
In exam, student is able to conclude that
misstatement exist but unable to ascertain the
pervasiveness
In exam, student gets confused and not able to
conclude w.r.t opinion to be given
When the Auditor is unable to perform Audit
Procedure given in a particular SA
Risk of Material Misstatement increases due to
discovery of Material Misstatement
Internal Controls are not reliable
Auditor is in dilemma- For example- whether to
report to regulatory authority or no
When Auditor finds anything significant
When auditor is unable to continue
engagement
When Auditor discovers Fraud
When Auditor discovers misstatement
When Auditor identifies ROMM
When Auditor identifies undisclosed RPT
When Auditor identifies subsequent events
When Auditor identify instances of
noncompliance of laws and regulation
When Auditor identifies pending litigations
When Auditor identifies a complex matter
Auditor’s Response
Adverse Opinion as per SA 705
Qualified Opinion as per SA 705
Qualified or Disclaimer as the case may be
Just mention that “ Modify the opinion as per
SA 705”
Use the following phrase in exam
“ The auditor shall consider the implications in
his report and report accordingly”
Perform Alternative Audit Procedure.
If Alternative Procedure cannot be performed,
Modify the opinion as per SA 705.
Apply Further Audit Procedures
Perform more Substantive Audit Procedures,
Report as per Section 143(3), Communicate to
TCWG as per SA 265
Seek legal advise
1. Communicate to TCWG
2. Consider implication in his report
1. Determine whether withdrawal is
legally permissible
2. If legally permissible, determine
whether there is any requirement to
communicate to the regulatory
authorities and the authorities
appointing him.
3. As per Companies Act, practically he is
required to report to ROC and
Shareholders
Apply SA 240, 143(11), 143(12), SA 705 and
Determine whether it is possible to continue
Apply SA 450, 260 and 705
Apply SA 315, 330, 260, 450 and 705
Apply SA 550, AS 18, SA 240, CARO
2016 and SA 705
Apply AS 4 and SA 560
Apply SA 250 and SA 705
Apply 250, 560, 570 , Section 143(3)
and ensure whether provision for
Contingent Liability is made as per AS
29.
Seek expert opinion
2 ComCCCCCCc Compiled by CA Sanidhya Saraf
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When Auditor identifies material uncertainties Apply SA 570 and SA 701

in going concern
Default in Statuary dues SA 250 and CARO 2016

Additional Advice by the Author

Try to use good professional words in Audit. For instance.

1. Instead of using profit and loss or balance sheet write that “ identify risk at assertion level
ie. every material class of account balance, class of transaction or disclosure.
2. Use expressions like true and fair , professional scepticism, inherent risk , substantive
procedures, professional judgement, assertion level, account balance, class of
transactions, disclosure, reasonable assurance whenever possible.
Try to avoid general expressions.
3. Do remember each and every presentation tip taught in the classes.