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

Meera & Associates, a firm of Company Secretaries, is auditing a new client, Kaveri Textiles Ltd. The engagement partner asks what the auditor must document under SA 315 regarding the risk assessment. Which item is among those the auditor shall document?

The auditor must document the engagement team discussion, where required, and the significant decisions reached. SA 315 also requires documenting key elements of the understanding obtained, sources of information, risk assessment procedures performed, and the identified and assessed risks of material misstatement.

  1. AOnly the final audit opinion proposed to be issued
  2. BThe discussion among the engagement team and the significant decisions reached, where requiredCorrect
  3. COnly the names of the client's directors and their shareholding
  4. DThe client's budget for the next financial year

Explanation

Paragraph 32 of SA 315 requires the auditor to document the engagement team discussion (where required) and the significant decisions reached, along with key elements of the understanding obtained and the assessed risks. The proposed opinion and shareholding details are not listed in that requirement.

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