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CS Professional · Compliance Management, Audit and Due Diligence · Audit Principles and Techniques

An auditor of Ganga Agro Ltd wants to rely on evidence from last year's audit about the company's land title documents. Under SA 200, when may such information from previous audits be treated as audit evidence in the current audit?

Information from previous audits can serve as audit evidence only if the auditor has determined whether changes since the previous audit may affect its relevance to the current audit. Automatic reliance or total exclusion would be wrong.

  1. AProvided the auditor has determined whether changes have occurred since the previous audit that may affect its relevanceCorrect
  2. BAlways, without any evaluation, since audit evidence is cumulative
  3. CNever, because audit evidence must be obtained only in the current year
  4. DOnly if the same engagement team performed the earlier audit

Explanation

SA 200 states that audit evidence may include information from previous audits, provided the auditor has determined whether changes have occurred since the previous audit that may affect its relevance to the current audit. Blanket reliance or blanket exclusion is incorrect.

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