Asked only once in RTP in Nov 2010, never asked again
It is simply list of information peer reviewer should collect and examine when he goes for review. Answer is huge ok to understand difficult to retain
Illustrative Checklist of Audit Programme of a Reviewee – A checklist which illustrates the contents of the audit programme of a reviewee for the guidance of the reviewer is given hereunder:
– Appointment and the relevant resolution about the appointment.
– Terms of the engagement including reports required and manner of determining audit fees.
– System of book-keeping and the list of the books of accounts maintained by the entity.
– Particulars of the promoters, directors and their powers.
– Names of persons who write the books of accounts and other authorised officers.
– Memorandum and Articles of Association, Partnership Deed as applicable.
Details of business of client and its accounting systems by reviewing and assessing information on:
– Nature of business of the entity; and
– The internal control system including owner/manager controls.
– Profit and loss account, balance sheet, auditor’s and directors’ reports of the previous year and the reports of internal auditor.
Analytical review procedures in order to:
– identify areas of accounts which are important because of their size;
– highlight unusual or unexpected figures or relationships in the accounts;
– Design audit test which concentrates on important and unusual items; and
– obtain sufficient audit assurance to allow the reduction or even elimination of detailed testing in some areas.
– Assessment of audit risk by using the professional judgement and audit procedures to ensure that it is reduced to an acceptably low level.
– Preliminary estimates of materiality for the audit as a whole.
– Class of accounting transactions which are relevant and to decide the type of testing and samples.
– Selection of representative samples.
– Compliance tests to evaluate the reliability of key controls.
– Material weaknesses in the operation of key controls to management.
– Performance of analytical review procedures, substantive tests of detail to obtain sufficient, relevant and reliable audit evidence for each audit objective.
– Fundamental accounting assumptions i.e., consistency, going concern and accrual basis of accounting are followed by the client in the preparation and presentation of financial statements.
– Any change in an accounting policy which has a material effect have been disclosed.
– Audit report is received from all the Branch Auditors and any reservation made by the branch auditor is appropriately dealt with in the finalisation of accounts.
– Working papers contain all audit evidence, and are cross-referenced.
– Summary of work done, problems, important judgements and audit conclusions.
– Review by senior incharge of work of all assistants, audit programme followed and work performed as per time schedule.
– Permanent file updated throughout the audit.
– Review of unadjusted errors to determine whether individual and aggregate effect is material.
– Compliance with Companies Act, 1956 and other relevant statutory requirements.
– Compliance of all mandatory Accounting Standards issued by the Institute.
– Post balance sheet events.
– Formulation of draft audit opinion.
– Comparison of budgeted time to actual and reasons for major variations.
– Complete staff evaluation forms.
– Planning of next year’s audit and including it in the permanent audit file.
Finally, the reviewer may decide to employ substantive procedure only in case he is unable to place reliance in specific control procedures. The application of substantive review procedures would involve inspection of working papers of the attestation engagement.