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

An audit firm assigns a team of largely first-year trainees to audit Deccan Steels Ltd, while a similar entity is audited by an experienced team. The partner asks about the effect of team experience on the extent of documentation of the understanding of the entity under SA 315. Which is correct?

A team of less experienced individuals may require more detailed documentation to help it obtain an appropriate understanding of the entity, provided the requirements of SA 230 on audit documentation are always met. The extent of documentation therefore reflects team experience and capabilities.

  1. ALess experienced teams may require more detailed documentation, provided the requirements of SA 230 are always metCorrect
  2. BLess experienced teams may document less, since SA 230 does not apply to them
  3. CDocumentation extent is fixed irrespective of team capability
  4. DExperienced teams must always document more than inexperienced ones

Explanation

SA 315 states the extent of documentation may reflect the experience and capabilities of team members; provided SA 230 requirements are always met, a less experienced team may need more detailed documentation to help it understand the entity. Option B wrongly dilutes SA 230, which always applies.

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