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CA Intermediate · Auditing and Ethics · Completion and Review

During the audit of Gomti Foods Ltd, the engagement partner CA Anil reviews the audit file and finds that a junior member's working paper on trade receivables confirmations shows many replies as unreconciled with no follow-up. The report is yet to be signed. Under SA 220 and SA 230 principles, what is the most appropriate action?

The engagement partner should have the unreconciled confirmation differences followed up and resolved, with the work and conclusions documented, before signing the report. Under SA 220 and SA 230 the partner remains responsible for review, and deleting papers or delegating responsibility is improper.

  1. ASign the report, since the junior is responsible for the working paper
  2. BDirect that the unreconciled differences be followed up and resolved, and document the work and conclusions before the report is issuedCorrect
  3. CDelete the working paper from the file
  4. DAdd a note in the file after the report date without any explanation

Explanation

The engagement partner is responsible for reviewing the work performed and being satisfied that sufficient appropriate evidence supports conclusions before the report is dated. Unresolved differences must be followed up and the work documented. Responsibility cannot be passed to a junior, and deleting papers or undocumented later additions breach documentation requirements.

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