Skip to content

CA Intermediate · Auditing and Ethics · Audit Documentation

CA Meera is auditing Bharat Steels Pvt Ltd. During the audit she finds information that is inconsistent with her final conclusion on a significant inventory valuation matter. Which response about documentation is correct under SA 230?

The auditor must record how she addressed the inconsistent information when forming her conclusion on the significant matter. Dropping it, noting only the final conclusion, or relying on undocumented oral discussion would not show the work performed, which SA 230 requires to be evidenced in the file.

  1. AOmit the inconsistent information because it conflicts with the final conclusion
  2. BDocument how she addressed the inconsistency in forming her conclusionCorrect
  3. CDocument only the final conclusion since the earlier information is superseded
  4. DDiscuss it orally with the partner without any record, as oral discussion suffices

Explanation

SA 230 requires that if the auditor identifies information inconsistent with the final conclusion on a significant matter, the documentation must include how the inconsistency was addressed. Leaving it out or relying only on oral discussion would not evidence the work done. Documentation of the final conclusion alone is incomplete.

Did you get it right without looking?

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

Practise Audit DocumentationFree diagnostic mock

More Audit Documentation questions