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

CS firm Iyer & Co. audits Narmada Foods Ltd for the fifth consecutive year. The business processes are largely unchanged, but a new ERP module was introduced this year. How does SA 315 guidance treat the risk assessment documentation for this recurring audit?

For a recurring audit, certain documentation may be carried forward, but it must be updated as necessary to reflect changes in the entity's business or processes. The new ERP module is such a change, so the earlier documentation needs updating rather than being ignored or wholly recreated.

  1. AAll earlier documentation must be discarded and recreated from scratch
  2. BCertain documentation may be carried forward, updated as necessary to reflect changes in the entity's business or processesCorrect
  3. CDocumentation need not be updated for the ERP change
  4. DDocumentation is required only in the first year of the engagement

Explanation

The guidance on recurring audits states that certain documentation may be carried forward, updated as necessary for changes in the entity's business or processes. The new ERP module is a change that requires updating, so carrying forward without update is wrong, and full recreation is not required.

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