Skip to content

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

Sagar Pharma Ltd has been audited by the same firm for five years. For the current year, the engagement team finds that the entity's business processes are largely unchanged except for a new ERP module in the sales cycle. How may the team treat last year's understanding documentation under SA 315?

In a recurring audit, certain documentation may be carried forward but must be updated to reflect changes in the entity's business or processes. Here the new ERP module in the sales cycle must be reflected, while unchanged areas need not be recreated from scratch.

  1. ACarry forward all documentation unchanged, including the sales cycle
  2. BDiscard all prior documentation and recreate it from scratch
  3. CCarry forward certain documentation, updated as necessary to reflect the changes such as the new ERP moduleCorrect
  4. DCarry forward only documentation relating to the internal audit function

Explanation

SA 315 says that for recurring audits, certain documentation may be carried forward, updated as necessary to reflect changes in the entity's business or processes. The ERP change must therefore be reflected. Carrying forward unchanged ignores the change; full recreation is not required.

Did you get it right without looking?

One question tells you little. A timed set on Audit Process and Documentation shows your real accuracy, how long you take and where you lose marks.

Practise Audit Process and DocumentationFree diagnostic mock

More Audit Process and Documentation questions