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

During risk assessment at Sundaram Pharma Ltd, the engagement team evaluates the design of controls over purchases and checks whether they have been implemented. How may the evidence from this work be used, according to SA 315?

The evidence is used as audit evidence supporting the risk assessment. SA 315 says information gathered through risk assessment procedures, including evaluating control design and implementation, supports the assessment, which in turn determines the nature, timing and extent of further audit procedures rather than eliminating them.

  1. AIt is used as audit evidence to support the risk assessmentCorrect
  2. BIt has no evidential value and must be discarded
  3. CIt can be used only to support the final audit opinion, not the risk assessment
  4. DIt replaces all substantive procedures on purchases

Explanation

SA 315 states that information from risk assessment procedures, including evidence from evaluating control design and implementation, is used as audit evidence to support the risk assessment. The risk assessment then determines the nature, timing and extent of further audit procedures; it does not replace them.

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