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

M/s Rao & Associates, Company Secretaries, are conducting the audit of Kaveri Textiles Ltd. The engagement partner wants to hold the discussion on the susceptibility of the financial statements to material misstatement, but two team members are at a distant plant. Under the SA 315 guidance, what is the position?

The engagement partner may discuss matters with key members of the team and delegate discussion with others. SA 315 recognises that a single discussion including everyone is not always necessary or practical, for example in a multi-location audit, so a communications plan may be used.

  1. AThe discussion is invalid unless every team member attends a single meeting
  2. BThe engagement partner may discuss with key team members and delegate discussion with others, since a single discussion with all members is not always necessary or practicalCorrect
  3. CThe discussion can be skipped entirely for multi-location audits
  4. DOnly specialists, and not the engagement team, should take part in the discussion

Explanation

The guidance in SA 315 says it is not always necessary or practical for the discussion to include all members in a single discussion, as in a multi-location audit. The engagement partner may discuss with key members and delegate discussion with others. Requiring all members in one meeting is wrong because the text expressly relaxes this.

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