Skip to content

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

CA Rohan audits Deccan Auto Components Ltd for the third year. Using last year's file, he carries forward the documentation of the entity's understanding of its business and processes, but a new product line was launched this year. He updates only the portion relating to the new product line. A junior reviewer says that documentation of risk assessment cannot be carried forward. Which view is correct under SA 315?

SA 315 permits carrying forward certain documentation in recurring audits, provided it is updated as necessary for changes in the entity's business or processes. Rohan's updating for the new product line is therefore appropriate, and the reviewer's claim that nothing can be carried forward is incorrect.

  1. AThe reviewer is correct; every audit needs entirely fresh documentation
  2. BCarrying forward is allowed only for entities with turnover below a prescribed limit
  3. CCarrying forward is allowed only if no changes occurred in the entity
  4. DFor recurring audits, certain documentation may be carried forward, updated as necessary to reflect changes in the entity's business or processesCorrect

Explanation

SA 315 states that for recurring audits certain documentation may be carried forward, updated as necessary to reflect changes in the entity's business or processes. Rohan updated for the new product line, which is consistent with this. The view that changes bar carry-forward is wrong because the standard expressly contemplates updating.

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