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

An auditor of Narmada Steels Ltd records the results of the risk assessment as part of the documentation of further audit procedures rather than in a separate paper. A reviewer objects. What is the correct position under SA 315?

The treatment is acceptable. SA 315 says the manner of documentation is for the auditor to determine using professional judgment, and risk assessment results may be documented separately or as part of the documentation of further procedures, depending on entity size, complexity and audit methodology.

  1. AAcceptable, because the results may be documented separately or as part of documentation of further proceduresCorrect
  2. BNot acceptable, because risk assessment results must always be a separate document
  3. CAcceptable only if the entity is listed
  4. DNot acceptable, because further procedures cannot be documented with risk assessment

Explanation

SA 315 allows the results of the risk assessment to be documented separately or as part of the auditor's documentation of further procedures. The form and extent depend on the entity's nature, size and complexity and the audit methodology, so the reviewer's objection is unfounded.

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