Skip to content

CS Professional · Compliance Management, Audit and Due Diligence · Audit Process and Documentation

A small proprietor-run company, Ganga Traders Pvt Ltd, is audited by a team of two junior members under a partner. The partner asks how to document the understanding of the entity and risk assessment. Which statement is consistent with SA 315?

Documentation may be incorporated in the overall strategy and audit plan for a small entity, and a less experienced team may need more detailed documentation to understand the entity, as long as SA 230 requirements are always met. The auditor decides the manner using professional judgment.

  1. ADocumentation may be incorporated in the overall strategy and audit plan, and a less experienced team may need more detailed documentation, provided SA 230 requirements are metCorrect
  2. BDocumentation must always be a separate standalone file regardless of entity size
  3. CA less experienced team may reduce documentation because the entity is small
  4. DThe form of documentation is fixed by the entity's management

Explanation

SA 315 says the manner of documentation is a matter of professional judgment; for small entities it may be part of the overall strategy and audit plan. A team of less experienced individuals may require more detailed documentation, provided SA 230 is always met. Reducing documentation for a junior team reverses the position.

Did you get it right without looking?

One question tells you little. A timed set on Audit Process and Documentation shows your real accuracy, how long you take and where you lose marks.

Practise Audit Process and DocumentationFree diagnostic mock

More Audit Process and Documentation questions