Area

Overall ARP

PPE: Ind AS 16

CWIP

Revenue: Ind AS 115

Tie TP & FS
TB to S R
Recom
Deferred & Unbilled
TOC & TOD
Cut off
Gross margin
Rev recognition policies
Disclousure
Discounts & Cash Discount
Price & Quantity variance

Manual JE
TOC
Cut off
confirmation
Day sales O/s

Inquire

Sales contracts
Income statement table

List
TOC
Subsequent sale Reg
reason

Payroll: Ind AS 19

Salary, Wages and Bonus

Gratuity
Contribution to provident and othe
Total of Welfare expense

TOC
KYE
CTC- New joinee
CTC- Existing EE
Inventory Ind AS-2

Equity

Contingent liability - Ind AS 37

Short term borrowings:

Long term Borrowing

Other Current Liabilities

Other Financial Liabilities

Trade payables

Trade Receivable

SBP
Deposit

ROU assets

Trade receivable

VAT / GST

Cash / bank

Prepaid

Payroll related accruals - PTO

Payroll related accruals - commissio

Bonus accrual

ESPP

Expenses

Forex
Points
Check spelling
Check PY numbers with signed FS
Check numberings / references given are correct
Check formulas of totals & subtotals (both years)
Check Fx rates

Objective : Test completeness, existence, ownership and correctness of account balances.

To ensure completeness we need to Obtained the FAR for the period March 2022 and Traced current year balances to TB
and previous year balances to audited financial statements.
Map FAR GL's to TB and perform reconciliation with FAR register.
To ensure correctness of depreciation performed, the recomputation of depreciation and ensured that the depreciation
calculated by system is accurate. (Rationalisation of depreciation)
To ensure Existence perform TOC- For the additions and deletions during the year.
Verify any assets to be classified as held for sale unde Ind AS 105- Obtain board approval for the same.

Check any of the assets need to be tested for impairment during the year under Ind AS 36, Obtain valuation reports for the
same. We have verified if the impairment provision provided by the management is appropriate.
Analysed the reasons for depreciation variances as compared to earlier periods. (Rationalisation)
Validate useful life as per Company policy and provisions of Companies Act 2013 and Schedule -II.
Verify whether the residual value 5% is considered as per the Companies Act 2013.
To ensure existence Obtaine the Fixed Assets Physical verification reports performed by the management during FY 2021-
22 and verified if any material discrepancies noted are addressed appropriately by the management. To be reported in
CARO 2020 as well.
In case of Lease hold properties- check singed lease hold agreements.
To enusure ownership of assets We have obtained all the title deeds of immovable property and ensured that they are in
the name of the company and if not has been reported accordingly.

Test completeness, existence and correctness of account balance

Traced current year balance to TB and previous year balance to audited financial statements.
Obtain the schedule from the client and verified mathematical accuracy of the same.
We will do opening balances recon and ensure completeness by performing IPE testing for the same.
We have carried out a comparison of amounts capitalised from CWIP and additons made to FixedAssets and found no
major variances.
We have verified aged balance and reason for non - capitalisation.
Ensured that all applicable disclosures as required by revised Schedule III and Accounting Standards are made.

To ensure we will perform Vendor Evaluation for Key items.

We have Obtained Management Notes on CWIP project status and planned completion and subsequent capitalization and
reason for aged balances.

Objective : To ensure correctness and completness of Revenue from operations

To ensure completeness trace current period balance to TB and previous year balance to audited financial statements.
Map revenue GLs in TB and performed reconciliation of GL with Sales register.
To ensure correctness of revenue Recomputation of revenue if it is on period basis.
To ensure correctness of Deferred/ UER/ Contract Liability and unbilled revenue/ Accrued Revenue/ Contract Asset during the CY.
Perform TOC & TOD's
Cut off procedure performed.
Performed Gross margin analysis and noted reasons for variations above 5%.
We have assessed the Company’s revenue recognition accounting policies, including those relating to allowances, discounts and incentiv
We assessed the disclosures in the standalone Ind AS financial statements in respect of revenue.
According to guidance given in Ind AS 115, volume based discounts on secondary sales, cash discount, etc and any amounts which is p
We have performed price and quantity varaiance analysis.

Revenue Recognition to be a Fraud risk factor:

Review unusual manual JE and understand the business rationale for unusual transactions, if any
Perform test of controls of revenue (during PY)
Perform appropriate sales cut-off procedures.
Obtain confirmation of balances from customers (during year-end)
Analyze day’s sales outstanding
Inquire of the entity’s sales and marketing personnel regarding sales or shipments near the end of the period and their
knowledge of any unusual terms or conditions associated with these transactions.
Review sales contracts to determine that the entity has considered the appropriate terms and conditions when calculating
the revenue recognized.
Testing of Sales invoices based on Income statement table.

For Credit Notes:

TOC-
We have mapped the same to subsequent sales register .
We have also documented the reason for return of goods.

Objective: To test the Completeness, Occurrence and Measurement of Employee cost.

Traced current balances to TB and previous balances to audited financial statements.

Reconciled salary for the year as per pay register to GL and perform IPE tetsting for enuring completeness.
Performed the head count reconciliation- For ensuring occurrence.
Perform Overall Variance Analaysis as compared to PY expenses.
Recompute Increment % and sample verification of Increment letters with actual increments as per pay register.
Performed the reasonability test for PF, ESI based on pay costs. (PF: 12% of basic salary and dearness allowance, The ESIC
act, 1948, has fixed the percentage contribution ER at 3.25% and EE 0.75% of the wages.
We have validated the base file for gratuity to contract workmen given to actuary. Gratuity = (15× last salary drawn ×
number of service years completed)/26),Tax-Free Gratuities up to ₹20 Lakhs
We have performed the testing for ovetime paid to contract workmen.
We have verified the payment of severance pay to 80 employees laid off and and verified the F&F settlement of five
employees on sample basis.
We have ensured compliance with minimum wages and Statutory payment of bonus- all Factories and every other
establishments, which employs twenty or more workmen. The Payment of Bonus Act, 1965 provides for a minimum
bonus of 8.33 percent of wages.

We have obtained and prepared the summary of union agreements (LTS) entered with the labour unions by various units
We have performed plant wise variance analysis for casual and contract labour
We have performed the analysis of joining bonus paid during the current year and related mail correspondence for the
same.
We have analysed the unit wise variance in staff welfare expenses and tested on Sample basis.
We have obtained the F&F working for emplyees who resigned during the period and verified if the payments are
approved and working are made as per the policy of the company.
We have verified retainership fees and related agreements or mail communications for the same.
Recomputation of Bonus Accrual and verified the subsequent bonus payaments.

1. We have selected 25 samples for payroll testing which comprises of ten new joinee, ten resigned employee and five existing employee
as on 31st March 2022.
2. We have verified the KYE documents, Background check reports of existing and new joinee employee.
3. We have verified the CTC of new joinee as per authorized appointment letter and matched it with the pay register.
5. We have verified the authorized resignation letter of resigned employee and full and final settlement made to them and matched it
with the pay register of respective month.

For severance pay:

a) We have matched the total expense as per GL with the pay register.
b) We have verified the termination letter and full and final settlement of five employees and matched it with the pay register.

Comparison of salary of Managing Director with resolution passed in EGM held

Objective: Test the Completeness, Existence, Valuation, Presentation & Disclosure of Inventories- SA 501

1. Trace current year balance to TB and previous year balance to audited financial statements.
2. Trace the cut-off information obtained during the physical observation to the accounting records of sales and purchases.
3. Test the provisions to reduce the valuation of inventory to net realizable value, (e.g., obsolescence and other reserves)
and verify that
4. Evaluate appropriateinstructions
management’s adjustmentsand
areprocedures
made in accordance withand
for recording the entity's accounting
controlling policies
the results of theand applicable
entity’s physical
financial
inventory reporting
5. Reviewed counting.framework.
Observe the
the reconciliation of performance of the entity’s
the valued physical inventorycount procedures
compilation andthe
with perform
generaltest counts.
ledger Trace
account test counts
balances and to
th
the entity’s inventory compilation and determine that the inventory compilation accurately reflects actual inventory count
6. Test the valuation of inventory to verify that it is performed in accordance with the entity's accounting policies and applic
results.
7. Ageing analysis to perform , we have computed the same based on stock issued during the year with the stock as on Mar
8. We have to obtain the working of Overhead Calculation and Excise duty and verified the same. we have performed the re
9. Identified slow moving and non-moving items and evaluate need for provisioning.
10. Obtained the listing of Goods in Transit as on 31st March 2022 and verified whether it was subsequently received and re
11. Calculated the average rate on closing stock, obtain the reasons for the material variances, verify the rates from the purc

Purpose: To test the Completeness, Existence, Valuation of Share Capital.

Traced current year balance to TB and previous year balance to audited financial statements.
Traced the shareholding information to ROC filings.
Obtain confirmation from the registrar.
Verified the movement in Share Capital balance.
Inquired any restriction on retained earnings or other equity accounts.
Traced the movement in Reserves and Surplus.
Details of Unpaid Dividend.
The unpaid amounts as at March 31, 2022 have been traced to the certificate from bank and integrated enterprises
Further the shares for unpaid dividend has transferred to the demat account held with NSDL.

Purpose: To ensure correectness and completess of disclosure made in CARO and contingent liability

Reviewed the Demands made by various authorities, Minutes, Review of GL etc. and conclusion on the various matters after considerin
Obtained details of all the notices received during the year from the Company. Also, taken update for the cases pending till the Previous
Obtained legal confirmations from the lawyers, consultants handling the cases on behlaf of the Company for the cases pending as at Mar
Obtained direct confirmations from all the banks for the amount of bank gurantees taken as at March 31, 2022.

Conclusion: We have completed all planned work steps, including relevant principal substantive procedures described in the Global Au

Purpose: The above account represents Short Term Borrowings, which consists of WC Loan/CC from Banks, ST Loan from Bank and fr
To test the Completeness, Existence, Measurement, Presentation & Disclosure of Short Term Borrowings.

Traced current year balance to TB and previous year balance to audited financial statements.
Verified movement in account balance from opening to closing
Reviewed confirmation replies (including those for assets and liabilities) for evidence of liens, security interests, derivatives and assets p
Obtained summary of loans and interest and agree balances to the general ledger. Review for reasonableness the calculations of interest
Inquired whether loans payable are secured.
Inquired whether there are any loans where management has not compiled with the provisions of the loan agreement.
Ensured that all applicable disclosures as required by revised Schedule III and Accounting Standards are made.
We have tested all the items above threshold.

Purpose: To test the Completeness, Occurrence and Measurement of Long term borrowings.

Procedures Performed:
01. Trace current year balance to TB and previous year balance to audited financial statements.
02. Inspected new loan contracts to identify rights and obligations.
03. Review confirmation replies (including those for assets and liabilities) for evidence of liens, security interests, derivatives and assets
05. Obtain summary of non current loans and interest and agreed the balance with the GL, Reviewed the reasonableness the calculation
06. Inquire whether there are any loans where management has not compiled with the provisions of the loan agreement. None Noted.
07. Trace the repayment of loans to bank statement.
08. Inquire with the management and reviewed the agreements and noted that there were no changes in the terms of existing loans.
09. Inquire with the mangement and reviewed the principal and interest payments and noted that payment moratorium was not availed

Objective: Test completeness, existence and correctness of account balance.

Procedures performed:
1. Obtain the details of advance from commission agents from client.
2. Trace current year balance to TB and previous year balance to audited financial statements.
3. Obtain the schedule of advance from customers, commission agents and statutory dues payable and agree the amounts to the GL accou
4. Reviewed subsequent payment of statutory dues.
5. We have traced the payable amount to the excise duty records or letter received from excise department.
6. Reviewed ageing of advance from customer.
7. Review other liability to determine they are appropriate, determined that the amounts appear to be reasonable in comparison with prio
8. Search for unrecorded provisions and other liabilities.
9. Ensured that all applicable disclosures as required by Schedule III and Ind AS are made.

Objective: Test completeness, existence and correctness of account balance.

The above account represents Other Current Liabilities, which consists of Security Deposits Received, Unpaid dividends, Other

Procedures performed:
1. Obtain the details of Security Deposits received from client.
2. Traced current year balance to TB and previous year balance to audited financial statements.
3. Reviewed the movement in the Security Deposits during the period.
4. Security Deposits received has been traced to the agreements available.
5. Obtain the schedule of provisions, other liabilities and deferred revenue and agree the amounts to the GL accounts. Review sc
6. Review subsequent payment of statutory dues.
7. We have traced the payable amount to the excise duty records or letter received from excise department.
8. Review basis of provision for expenses.
9. Review the classification of security deposit as Long term or short term.
10. We tested key item testing for above threshhold for security depoist and other liabilities balance.
11. Receive security deposit confirmation.
12. Review other liability to determine they are appropriate, determined that the amounts appear to be reasonable in comparison with pr
13. Search for unrecorded provisions and other liabilities.

Analysed movement in the Account during the year.

Reviewed GL for the any unusual and large transactions.
Verified the supportings on sample basis for major expenses incurred during the year.
Analysed variance in closing balance on YoY basis.

Objective: To ensure completeness, existence, valuation and rights & obligation of trade payable balance as at March 31, 2022.

1. Agreement of subledger with GL- We have mapped the subledger balance to GL and noted no exception.
2. Search for unrecorded trade payable and trade payable cut-off - We have performed cut-off procedures and reviewed subsequent GLs a
3. Unsual items review - We have reviewed the GLs accounts for major vendors to check if any unusal transactions taken place during t
4. Traced the current year balance to TB and previous year balance to audited FS - We have traced the current year balance to TB and pr
5.Valuation of accounts payable in foreign currency - We have identified balances in foreign currency and ensured that the same are res
6. Creditors ageing - We have tested ageing of creditor balances and obtained reasons thereof for the differences, if any.
7. Creditors confirmations - We have rolled out confirmation for balances as at March 31, 2022 and obtained reconciliation for difference
8. MSMED creditors - We have obtained the confirmation rolled out by the company for identification of MSMED confirmation and en

Procedures performed: for TP/ Capex vendors

1. Obtain the party wise listing of trade payable balance and matched the same with TB and noted no exception.
2. Identify parties having closing balance above 50% of TE for confirmation procedure.
3. Additionally identify parties with major movements during the year for confirmation procedure.
4. Rolled out confirmations for the identified vendors.
5. For parties for which confirmation has been obtained, we traced the confirmation balance to books and tested reconciliation where appl
6. For parties we were not able to receive confirmation we obtained subsequent payment details or reasons for non payment.

Purpose: To ensure Existence, R & O, Valuation, Completeness and Presentation & Disclosure of Trade Receivable balance as at Marc

01. Ensure agreement of subledger with general ledger - We have performed reconciliation of sub ledger with general ledger and noted n
02. Ensure all credit balances in trade receivable account is reclassed to advance from customer - We have obtained the trade receivable l
03. Identification of other adjustments made to trade receivable and obtain reasons/ supporting for the same - We have reviewed the GL a

04. Ensure correctness and completeness of provision for impairment of trade receivable (Allowance for doubtful accounts)
UBL follows the policy of 100% provision against receivable (other than secured and those receivable from contract units or government
Management has also reviewed status of unsold stock lying with various state government corporations and distributors and made prov
Management is of the view that adequate provision has been made against overdue balances, wherever considered necessary, and is confi

05. Perform Trade receivable cut off procedure.

We have performed cut-off for 15 units and based on same no exception was noted. The following are the key revenue recognition matter
(a) Certain state corporation policy manuals impose risks of breakages, expiry, etc. on to the supplier. Considering the industry practice
(b) Income from Contract Manufacturing operations under tie-up arrangement is recognised under "other operating income" on a net b

06. Accounts receivable in foreign currency. - We have ensured restatement of foreign currency balances as on March 31, 2022.
07. Ensure all applicable disclosure of schedule III has been complied with. - We have ensured all applicable disclosures required as per s
08. Test debtors ageing. - We have tested debtors ageing, all balances (other than secured and receivable from contract units) aged more
9. Trace current year balance to TB and previous year balances to audited FS - We have traced the current year balance to TB and previ
10. Roll out customer confirmations for balances above testing threshold and trace the same to the book balance. Obtain reconciliation in
11. ECL computation considering forward looking information for each category of customers.- We have reperformed and validated prov
12. We have performed debtor' sales outstanding analysis for top 50 customers.

Completeness: Obtain the mgmt calculation of the expenses and agree the follwing from calculation to the contractual term
Number of EE's, Number of Options granted, Official grant date, Vesting period of the scheme, Required performance conditions attach
Accuracy: Recalculated the expenses and check whether FV has been correctly spread over the stated vesting period.
Agree the FV of Share options to specialist's report and evaluate whether Specialist report is a reliable source of evidence.
Agree that the FV calculated is at the grant date.
Valuation: Scrutinse the assumptions used to predict staff turnover over vesting period.
Obtain WR form mgmt confirming that the assumptions used in measuring the expenses are reasonable.
Presentation & Disclosure: Employee cost & Equity infusion or Liability created

Method used: Equity settled / Cash settled

If No MKT value available for FV, then we need to audit the model used as follows:
Consider the appropriatensess of the model used
Review assumptions used and inputs into the option pricing model
Consider using an expert to provide evidence as to the validity of the FV used.
Check the sensivity of calculations to a change in the assumptions used in valuation.

To make opening to closing walk in ARP - Update variance reason (if any)
To see the break up as per FS & work on all components
To see signed rent agreements (validity of the same for CY)
To see classification as per agreement - short / long term
To obtain confirmation / perform alternative procedure (trace to bank / rent agreement )

To make opening to closing walk in ARP

To see the break up as per FS & work on all components
To see applicability - as this AS not applicable on short term / low value asset
-Reperformance of valuation of ROU Asset and Lease Liability computation for sample agreement selected.
To see signed rent agreements (validity of the same for CY)

To make opening to closing walk in ARP

To see the break up as per FS & work on all components
To obtain confirmation / perform alternative procedure (trace to bank / invoice )
Subsequent receiipt details & ageing
Perform TOD for key / rep samples
To update variance reason (if any)

VAT / GST - to be shown as net balance

To make opening to closing walk in ARP
Trace the balances to return
Trace the refund / amount paid to bank
Trace subsequent payment / receipt
To perform reconciliation (if any)

To obtain confirmation from banks

To do cut off procedures
If account is in other than Local currency, then check fx rate applied & forex (if any)

To Trace the amount paid to bank (Insurance / rent )

To make opening to closing walk in ARP - if required
To Trace the amount paid to invoice
To perform recomputation (if any)
To update variance reason (if any)

To update variance reason

To see PTO policy
To make opening to closing walk in ARP
To trace subsequent pay register

To see MBO bonus mails & True up / down mail

To make opening to closing walk in ARP
To see Subsequent payment in March

To make opening to closing walk in ARP

To see Subsequent payment in Feb / March

Do MOM for major vendors / expenses

Check TOD, major invoices,
Check whether the classification is correct as per invoice
Check rent invoices , trace rates to agreement
Check inflation rate (If any, applicable for rent)
Do variance analysis

Obtain break up
Test key samples
If no key samples, test top 5 samples
 Audit Assertions
Valuation /Accuracy
Completeness
Existence
Occurrence
Rights & Obligaitons
Presentation & Disclosure

Capex budget flow

1. The Capex budget for the year is approved in the board

meeting. Thethe
2. Based on approved budget isCapital
budget amount, allocated to variousRequest
Investment
(CIR) is raised separately for each projects proposed. The
CIR is approved
3. Based by Managing
on approved CIR, the Director
vendors of
arethe Company.
selected for the
project by PCMhas
The company committee andits
identified POland
are raised.
at Hyderabad and Palakkad locations to be assets held for sale since the sale is highly p
Procedure
performed

1. We have obtained the capex budget for the period

uploaded
2. in obtained
We have SAP ESSthe portal and
list of verified
CIR raisedthe amounts
during the budget
period 2020 from SAP using T-code ZIM03 and verified
3. We have compared the CIR raised against the budget to identify if the capital expenditure are within the limit of budget.
4. We have also verified the assets capitalised / accounted in CWIP and analysed the reason for the assets not yet capitalised.

Ageing (as per Schedule III Disclosure)- CWIP

More
Less than
1-2 year 2-3 Year than 3
1year
years

and incentives.
s which is payable to customers, incidental to sales are to be netted off with gross revenue from operations. Hence we are netting of trade discount, cas

Assumptions: Future inflation, Salary Increment %, Member mortality rate and rate of investment return on S

The company has created a plan for bonus payment called variable pay. This plan factors in bonus based on performance of
 nces and the perpetual inventory records. Investigate any unusual items and test other reconciling items based on the established testin
s and applicable financial reporting framework.
k as on March 2021 and ensured that the sufficient provisions have been made as per the policy of the company.
rmed the reasonability of the same.

ived and reasons were obtained for items aged over 6 months.
m the purchase register and latest agreements for our reference

r considering the legal opinions obtained by the client, lawyer's confirmations and analysis of matters by our tax teams - direct and indirect.
he Previous year.
ng as at March 31, 2022

he Global Audit Methodology. Based on the related combined risk assessments and the results of the procedures in this and related areas, we believe th

Bank and from Others.

and assets pledged as collateral for loans, cross-reference to the corresponding general ledger accounts and verify proper disclosures.
s of interest expense and interest payable. Test compliance with the terms, maturities, restrictive covenants, or other provisions of loan agreements.

s and assets pledged as collateral for loans, cross-reference to the corresponding general ledger accounts and verify proper disclosures.
calculation of interest expense and interest payable. Test compliance with the terms, maturities, restrictive covenants, or other provisions of loan agr

not availed by the Company.

the GL accounts. Review schedule for correctness and completeness, including whether other liabilities are consistent with our understanding of entit

on with prior years under consideration of your understanding of client's business and changes to it.

nds, Other payables, Creditors Capex, Interest due on borrowings etc.

ts. Review schedule for correctness and completeness, including whether other liabilities are consistent with our understanding of entity's bu

son with prior years under consideration of your understanding of client's business and changes to it.
quent GLs and noted no exceptions.
lace during the year and noted no exceptional items.
to TB and previous year balance to FS.
same are restated as at year end.

or difference in confirmation if any.

ation and ensured proper disclosure and interest compuation has been made for such balances.

n where applicable.

e as at March 31, 2022.

and noted no major exception.

receivable listing and ensured that all credit balances have been set off against the respective debtors balance and others reclassed to advance from cu
wed the GL accounts of major parties and noted no other exceptional adjustments being made.

government corporations) aged more than 180 days as at balance sheet date. No material difference in provision as at March 31, 2022 was noted base
d made provision against products which have expired, based on expected claims in this regard. Provision of INR 50.1 million has been made during t
and is confident of recovery of remaining amounts.

ition matters for information :

try practice and impact of breakages, expiry, etc. (which are recognized based on estimates), UBL recognizes revenue from sale to various state corpor
e" on a net basis and based on information provided to UBL by these contract units.

uired as per schedule III has been complied with.

) aged more than 180 days as at balance sheet date have been fully provided for, in accordance with UBL’s accounting policy and noted no exception.
TB and previous year balance to audited FS.
nciliation in case of any deviation.
lidated provisioning on basis of ECL Method and noted no material variance.

actual terms of the scheme:

itions attached to the options.
e since the sale is highly probable and the land is currently available for sale. The company has in fact carried out valuation of the land a

mit of budget.
t yet capitalised.
netting of trade discount, cash discount, transit breakages. We have tested and analysed the same

of investment return on Scheme assets.

based on performance of the company and individual performance. The variable pay is computed by assigning the weightage for comp
d on the established testing threshold.

direct and indirect.

d related areas, we believe that the procedures completed are appropriate for the financial statement assertions and their respective combined risk assess
isions of loan agreements.

other provisions of loan agreement.

h our understanding of entity's business and test unrecorded amounts.

derstanding of entity's business and test unrecorded amounts.

eclassed to advance from customers.

rch 31, 2022 was noted based on aforesaid policy. Refer tab 2/.
lion has been made during the year ended March 31, 2022. Refer tab 17/

sale to various state corporations on delivery of goods from its premises based on delivery period estimated by the management.

cy and noted no exception.

ut valuation of the land and obtained quotations for such sale. Further the company has obtained board approvals for the same, Hence s
g the weightage for company performance and individual performance. The combined weightage is arrived and applied on the target s
pective combined risk assessments.
vals for the same, Hence such assets have been disclosed separately.
nd applied on the target set.
9 The overall objective of the audit is to obtain reasonable assurance about whether the financial stateme
This is accomplished by designing an audit strategy that is responsive to the entity’s risks of material m
The risk of material misstatement is the risk that the financial statements are materially misstated prio
The RMM consists of risks at the financial statement level and risks at the assertion level
We use our professional judgment to identify risks of material misstatement based on our risk assessme

Inherent risks and what can go wrongs are risks of material misstatement at the assertion level.
When we identify a RMM that affects assertions across many accounts and disclosures in the financial st

CRA= Inherent Risk X Control risk

Audit Risk= CRA X Detection risk

We perform risk assessment procedures that are focused on the identification of inherent risks during th

 Our understanding of the entity, the environment in which it operates, the applicable financial reportin
IPA, UTB, ELC, Going conern, Need for specialist, Laws & Regulations, Litigations- Claims & Assessments,

Our risk assessment procedures include a combination of the following:

Performing analytical procedures on financial and non-financial information
Inquiring of Mgmt and those responsible for FR and appropriate individuals
Perform observation and inspection procedures

Risks of material misstatement at the financial statement level refer to risks that:
 Relate pervasively to the financial statements as a whole
 Potentially affect many assertions

Control risk is the risk that a material misstatement, either individually or when aggregated with other m
Detection risk is the risk that a material misstatement would not be detected by our audit procedures

whether a risk of material misstatement is a significant risk

The complexity or subjectivity of transactions

Whether the risk involves significant transactions with related parties
Whether the risk is related to recent significant economic, accounting or other developments
Involving a wide range of estimation uncertainty
significant transactions that are outside the normal course of business or appear to be unusual

We determine risks of material misstatement at the assertion level to be significant risks, When we iden
Risks of material misstatement due to fraud
Significant transactions with related parties that are outside the normal course of business for the entit

We perform the following procedures when we identify significant risks

Regardless of whether we rely on controls, we identify the relevant controls addressing the significant r
We design and perform substantive procedures that are responsive to the significant risk
We communicate significant risks we identified to those charged with governance
We consider significant risks in our determination of key audit matters
The partner in charge of the audit participates directly in the design and performance of audit procedur

components of the system of internal control at the entity level, may include:
The integrity of management
Unusual pressures on management
The nature of the entity’s business
Factors affecting the entity’s industry
The influences of key stakeholders on management’s actions
The presence of risks of material misstatement due to fraud
Management’s experience and knowledge
Changes in management during the period
Complexity of the organization
Legal and regulatory environment
whether the financial statements as a whole are free from material misstatement, whether due to fraud or error
he entity’s risks of material misstatement.
are materially misstated prior to the performance of our audit procedures
assertion level
nt based on our risk assessment procedures,

at the assertion level.

d disclosures in the financial statements, the risk is likely pervasive to the financial statements and we identify a RMM at the financial state

tion of inherent risks during the execution of the following procedures:

he applicable financial reporting framework, the components of the system of internal control at the entity level, and other risk assessmen
tions- Claims & Assessments, understand Acc . Estimates, MOM and Contracts and understand RPT
when aggregated with other misstatements, could occur in an assertion about a class of transactions, account balance or disclosure and w
ted by our audit procedures

other developments

appear to be unusual

gnificant risks, When we identity:

ourse of business for the entity

ols addressing the significant risk and evaluate the design and implementation of those controls
e significant risk

erformance of audit procedures as considered necessary to obtain a thorough understanding of the significant risk
fy a RMM at the financial statement level.

evel, and other risk assessment procedures

nt balance or disclosure and will not be prevented, or detected and corrected, on a timely basis by the entity’s controls.
Sr.No Interview Questions Answers
1 Strong self introduction
2 What is Significant Account?
3 What are the significant risks and how to reduce it to acceptable level?
4 What is control exception & control deviation?
5 How will you test Test of Design & Operating effectiveness of a control?
6 What are all the assertions & its impact on FS?
7 Audit procedures for Payroll, Revenue, SBP, PPE, Trade receivables and Payables?
8 Revenue 5 Step model
9 What are Risk assessment procedures and How to perform the same?
10 What is entity level controls?
11 How to avoid management override of controls?
12 What is control defination as per Ind As?
13 When we will qualify ICFR reporting?
14 What is PM, TE and SAD?
15 How to determine measurement basis for PM?
16 Changes in CARO & S-III ?
17 Team Handling query on deliverables?
18 Standars on Auditing in Brief
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20
21
22
 Basics
Tools Applicability
EY Microstart BS items
Income Statement table PnL items
EY Random Which line items we have to select for sampling

Based on Expectation of users of FS we will select Either:

Earnings based
Activity based
Capital based

Particulars Rs in Lakhs
1 PBT 4080
2 Planning Materiality (PM) 408 10% of PBT
3 Tolerable Error (TE) 204 50% of PM
4 SAD 20.4 5% of PM

Testing Threshhold (TT):

Based on TE we will decide TT= % of TE
Control Riks Assessment (CRA)
CRA Rely on control Inherent Risk Assest / Income A/C
Minimum Yes Low 75-100%
Low Yes High 50-75
moderate No Low 25-50
High No Higher 10-25

Note
1 PM is something which we have to see on overall fin level
If any accounting / Judgemental diff b/w client & Us > PM and client not ready to pass adjustment entry- we will qualify

2 TE we will verify on Caption-Levels ( Like Items in BS & PL)

Its need to get accounted in books

3 SAD which we will verify on Invoice level

Accumulate all SAD's and check whether it is > TE/PM

The principal methods of selecting samples are:

Random sample selection
Systematic sample selection
Haphazard sample selection
TOC- Sample Selection

IT Dependent Manual control

Nature of Control Frequency of Performance Min No. of Items to test

Manual control and the
manual portion of an
ITDM control, Daily or many times per day 25/(60, if only one manual control) Note1
Weekly 5
Monthly 2
Quarterly 2
Annually 1

Note 1: The minimum sample size of 25 assumes that the population is large (i.e., greater than 250 occurrences).
For certain types of controls (e.g., ITGCs), we may identify a small number of control occurrences for a control type that
In these circumstances, if the number of control occurrences:

Note1 Min Sample size

>250 25
250 & Upto 5 10%
<5 100%

Consider the minimum sample size for lower risk controls

Nature of Control Frequency of Performance Min No. of Items to test

Manual control and the
manual portion of an
ITDM control, Daily or many times per day 10/(60, if only one manual control) Note1
Weekly 2
Monthly 1
Quarterly 1
Annually 1
 Rs in Lakhs

Liability / Expense A/c

25-50% 153 204 Key Items are those transactions which have value > TT
15-25 102 153 Key items are transactions or parties having > 102 Lakhs value
10-15 51 1020
5-10 20.4 51

adjustment entry- we will qualify accounts in Audit report

ater than 250 occurrences).
occurrences for a control type that operates frequently.
Based on Income Statement - (for P& L Items) we will select samples for Revenue

In Income Statement - 3 tables are there depends onTOC & Risk we will decide under which table we are falling
Accordingly we will decide no of sample we need to take
From Population we have to remove key items only I.e Representative sampling
Sum of Representative sampling / Tolerable Error will come multiples under those tables - Accordingly we will decide no.of sam

Representative sample=Total Population- Key Items

No of samples to Select Based on multiples of = Representative samples/ TE
e we are falling

dingly we will decide no.of samples considering CRA