Takur and Co; Chartered Accountants were conducting an audit of an LLP. They have verified the Receivables and concluded that all the Receivables…
CA Intermediate · Auditing and Ethics · PYQS · September 2025
Takur and Co; Chartered Accountants were conducting an audit of an LLP. They have verified the Receivables and concluded that all the Receivables are genuine and recoverable. However, before the final completion of the audit, the auditors came to know of severe financial crisis of one of the Receivables, M/s. Raj Enterprises, whose outstanding account balance was material to the overall Receivables figure as on the date of financial statements. CA Takur had discussions with the appropriate level of management to address the issue, and the management finally agreed to make provision for the same, as suggested by the auditor. You are required to - (i) Ensure how the auditor can fulfil the "Documentation" part of this matter. (ii) Mention any four different examples of "Audit Documentation".
Suggested Answer and Working Notes:
(i) The auditor shall document discussions of significant matters with management, those charged with governance, and others, including the nature of the significant matters discussed and when and with whom the discussions took place. If the auditor identified information that is inconsistent with the auditor's final conclusion regarding a significant matter, the auditor shall document how the auditor addressed the inconsistency. Considering the above, the auditor shall document the minutes of the discussions with the management, regarding the financial crisis of M/s Raj enterprises, the matters discussed, the persons representing the management and the auditor, the amount recommended for provision by the auditor and the amount of provision finally accepted and provided by the management and any other relevant data in support of the same. (ii) Examples of Audit Documentation: Audit programmes.Analyses.Issues memoranda.Summaries of significant matters.Letters of confirmation and representation.Checklists.Correspondence (including e-mail) concerning significant matters.
Topics: Audit Documentation
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