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

Nair & Associates are in the third year of auditing Malabar Spices Ltd, whose business and processes changed only slightly this year with a new billing module. The senior asks whether last year's risk assessment documentation can be reused. What is the correct position under SA 315?

Certain documentation may be carried forward in a recurring audit, but it must be updated as necessary to reflect changes in the entity's business or processes. Reusing it unchanged ignores the new billing module, and SA 315 does not require everything to be recreated each year.

  1. AIt cannot be reused; all documentation must be created afresh every year
  2. BIt may be carried forward as is, with no updating, since the audit is recurring
  3. CCertain documentation may be carried forward, updated as necessary to reflect changes in the entity's business or processesCorrect
  4. DIt may be carried forward only if the engagement team is unchanged

Explanation

For recurring audits, SA 315 says certain documentation may be carried forward, updated as necessary to reflect changes in the entity's business or processes. The new billing module is a change requiring updating, so carrying forward unchanged is wrong, and fresh preparation is not mandated.

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