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CMA Intermediate · Corporate Accounting and Auditing · Audit Engagement, Audit Program, Audit Documentation and Audit Evidence

Under SA 230 as adopted in India, what is the minimum period for which engagement documentation should be retained, and why does it differ from the ISA 230 period?

The minimum retention period under SA 230 is seven years. India lengthened the ISA 230 period of five years because the Chartered Accountants Act, 1949 and the regulations made under it prescribe seven years as the minimum retention period for working papers.

  1. AFive years, the same as ISA 230
  2. BSeven years, because the Chartered Accountants Act, 1949 and regulations made under it prescribe seven years for working papersCorrect
  3. CEight years, because the Companies Act, 2013 requires books to be kept for eight years
  4. DThree years, because the audit is repeated every year

Explanation

ISA 230 prescribes a minimum of five years. SA 230 prescribes seven years because the Chartered Accountants Act, 1949 and its regulations prescribe a seven-year minimum retention for working papers. The five-year option is the international standard and is wrong for India.

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