Interesting Audit Updates

Audit reports of FY 15-16, will have a New Annexure to Independent Auditor Report for all companies.

Infact it is not just such annexure it is full fledged separate report in itself.

“Report on the Internal Financial Controls(IFC)”

Following will be the key components of this report as per Guidance Note on IFC

2.Management Responsibility for IFC
3.Auditor Responsibility
4.Meaning of IFC over Financial Reporting
5.Inherent Limitations of IFC over FR

Happy Additional Responsibilities !!!

If report is in appropriate happy exorbitant fines and damages!!!

I hope client pays additional fees!!!


As per Para A11, SA 230, auditor CAN prepare Completion Memorandum or Audit Summary, its optional not at all compulsory.

It is advisable to prepare it in large and complex audits.

Because it helps efficient and effective reviews (by seniors of juniors work) and inspections (after completion for quality testing).

Auditor records significant matters encountered during audit and how they were resolved. It can be prepared in any format, need not be understandable by experienced auditor as it is voluntary.

It also helps next year team to get birds eye view of audit, so they can plan next years audit.

Further I will sending amendments for Nov 15 by month end.

CA Ravi Taori


Interesting Audit Update

As per SA 330 it is not mandatory to perform test of controls each year, it should be done once in 3 years.

Provided there is no change in controls from the previous year in which it was last checked.

But there is one important EXCEPTION , controls which are working to protect against “Significant Risk” ( where likely hood and impact of misstatement is high) should be checked “each year”.
CA Ravi Taori