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CA Intermediate · Auditing and Ethics · Completion and Review

In the audit of Himalaya Foods Ltd, the engagement partner CA Isha reviews working papers prepared by a senior assistant. She finds that significant judgements on revenue cut-off were documented but not discussed with anyone senior. The report is due in three days. Under SA 220 and SA 230, which response is most appropriate?

The engagement partner should review the work, assess the significant judgements on revenue cut-off, and document the review with its extent and timing before dating the report. The responsibility cannot be handed to the client's audit committee or skipped, because SA 220 and SA 230 require documented review.

  1. ARely on the senior assistant's judgement since reviews are only needed for junior staff work
  2. BReview the work, evaluate the significant judgements made, and document the review, including its extent and timing, before the report is datedCorrect
  3. CDelegate the review entirely to the client's audit committee to save time
  4. DDate the report after the due date without reviewing, to allow time for client comments

Explanation

Under SA 220 the engagement partner takes responsibility for direction, supervision and review of the work and must review significant judgements, and the review must be documented as per SA 230 so that the evidence of review is available. Review is required for all staff work, not only junior staff. The audit committee cannot perform the auditor's review, and skipping review to wait is not acceptable.

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