Review Procedures and Reporting by Peer Reviewer

Transcription

1 Review Procedures ad Reportig by Peer Reviewer

2 QUALITY OF REPORTING BY AUDITORS Desired Quality Audit report to cotai a clear writte expressio of opiio o the fiacial iformatio PU should have policies ad procedures to provide reasoable assurace that the reports issued are supported by the coclusios reached at each stage of audit Coclusios are adequately refereced Form ad cotet of report comply with expectatios

3 Level of Supervisio Reviewer to determie level of supervisio of egagemet uder review: Complexity of subject matter Qualificatios of audit team Extet of cosultatio available & used Degree of authority delegated to assistats Performace of audit team Risks iheret i the egagemet

4 Audit documetatio Must cotai adequate evidece to support audit opiio. Work of other auditors used. Whe reviewig workig papers reviewer to examie them from this viewpoit too.

5 Compliace PU to comply with reportig stadards prescribed uder the law. Comply with applicable form ad cotet requiremets uder statute, regulatio or cotract. Comply with SA 700 -The Auditor s Report o Fiacial Statemet.

6 Specific Circumstaces to be Metioed i Report Scope limitatio Use of work of other auditor Departure from acceptable accoutig priciples Iadequate disclosures Material future evet ucertaities Ay other matter that the auditor wats to emphasize

7 Basic Elemets of a Report Title Addressee Opeig paragraph Scope paragraph Opiio paragraph Date of report (as of completio date of audit) Place of sigature Auditor's sigature with Membership No.

8 Opeig Paragraph Idetify Fiacial Statemets (FSs) audited, icludig date ad period covered. Statemet that the FSs are the resposibility of the Maagemet. Statemet that the auditor's resposibility is to express a opiio o the FSs, based o the audit.

9 Scope Paragraph Describe scope of audit - as per SAs of ICAI Plaed ad performed to get reasoable assurace of freedom from material misstatemets Describe what audit icludes Audit provides reasoable basis for opiio

10 Opiio Paragraph Fiacial Reportig Framework (FRF) State whether FSs give a true ad fair view, i accordace with FRF Whether FSs comply with statutory requiremets

11 Stadard o Auditig (SA)- 700 Uqualified opiio. Modified report: Matters that do ot affect the Auditor s opiio Matters that do affect the Auditor s opiio Qualified opiio Disclaimed of opiio Adverse opiio

12 Uqualified Opiio FSs give a true & fair view i accordace with FRF Acceptable accoutig policies, cosistetly applied Complies with relevat statutory/ regulatory requiremets Adequate disclosure of all material matters relevat to proper presetatio, subject to statutory requiremets, where applicable

13 Matters That Do Not Affect the Auditor's Opiio Modify audit report by addig a para Goig Cocer Questio ot resolved but adequate disclosure made i the FSs Sigificat ucertaity, resolutio of which depedet upo future evets ad may affect the FSs Cotiued

14 Matters That Do Affect the Auditor's Opiio (A) Qualified Opiio Effect of disagreemet with the Maagemet (selectio of accoutig policies; method of applicatio; adequacy of disclosures) is ot so material ad pervasive as to require a adverse opiio Scope limitatio (imposed by Maagemet; circumstaces) is ot so material ad pervasive as to require a disclaimer of opiio Cotiued

15 Matters That Do Affect the Auditor's Opiio (B) Disclaimer of Opiio Limitatio o scope-material ad pervasive, auditor is uable to obtai sufficiet ad appropriate audit evidece Describe limitatio ad idicate possible adjustmets to the FSs

16 Matters That Do Affect the Auditor's Opiio (C) Adverse Opiio Disagreemet is so material ad pervasive Qualificatio is ot adequate to disclose the misleadig or icomplete ature of the FSs

17 Reportig o Egagemets to Review Fiacial Statemets Compliace of SRE 2400 (Revised) Egagemets to Review Fiacial Statemets. Moderate level of assurace that the iformatio subjected to review is free of material misstatemet ad this is expressed i the form of egative assurace.

18 Reportig o Egagemets to Review Fiacial Statemets If matters exist that impair true & fair view the auditors shall do: Quatificatio of possible effects Qualificatio of egative assurace or adverse statemet If material scope limitatio exists, the auditor shall give: Qualificatio of egative assurace or No assurace.

19 Reportig o Egagemets to Review Fiacial Statemets Report to cotai: Title Addressee Opeig paragraph idetifyig the fiacial statemet reviewed ad a statemet of the etity s maagemet ad that of the practitioer Scope paragraph shall describe the ature of review ad a statemet that audit has ot bee performed ad that the procedure udertake provides less assurace tha the audit ad that the audit opiio is ot expressed Statemet of egative assurace Date, place, practitioers sigature, membership umber ad firms registratio umber

20 REPORTING BY REVIEWERS Prelimiary Report Fial Report

21 Prelimiary Report O receipt of filled Questioaire, Reviewer may commuicate with the PU ad seek clarificatios. After o-site review, i case of deficiecies i systems ad procedures or o-compliaces the Reviewer to issue prelimiary report to PU immediately Scope of review performed ad scope limitatios, if ay, to be metioed i the Report. Cotiued

22 Prelimiary Report Prepare report o the letterhead of the Reviewer (idividual) Date/ Sigature with Membership o. ad Reviewer code o. Reviewer ot to metio ay ames of the cliets of PU i the report

23 Cotiued Fial Report Reviewer to submit Fial Report to the Board, with a copy to the PU. Fial Report should icorporate the fidigs as discussed with the PU. Fial report to be submitted to the Board should be accompaied by a Aexure to the Fial Report, together with copy of Prelimiary Report, if ay, issued ad PU s respose thereto.

24 Fial Report Reviewer may issue: a clea report, if of the opiio that the PU is coductig its affairs i a maer that esures quality of services redered by it. a qualified report i cases of: No-compliace with techical stadards QC system desig deficiecy No-compliace with QC policies ad procedures No-existece of adequate staff traiig programmes. The deficiecies are of such serious ature so as to to vitiate the efficacy of the key cotrol objectives.

25 Title Basic Elemets of Reviewer s Report Scope Paragraph Opiio Paragraph Limitatios Suggestios Referece to Prelimiary Report, if issued Date of the Report

26 Aexure to the Fial Report of M/s Geeral istructios: Tick Yes / No, wherever applicable. Sl. No. Particulars Obsrvatios 1 Date o which questioaire is received 2 Number of iitial samples selected for review 3 (a) Was there ay chage made i iitial sample selected by the Reviewer? (b) If Yes, specify the umber selected, after chage *4 Name of the perso (if ay) who helped i the coduct of review 5 (a) Whether geeral cotrols are i existece ad operatig effectively durig the period uder review? (b) If No, please specify areas: (i) Idepedece (ii) Professioal Skills ad Stadards (iii) Outside Cosultatio (iv) Staff Supervisio ad Developmet (v) Office Admiistratio Yes No * Please give the ame of the qualified Assistat whose ame was commuicated while givig acceptace for carryig out review assigmet.

27 6 Whether audit records admiistratio is satisfactory? 7 Whether workig papers are properly maitaied? Yes No 8 Whether review of iteral cotrol systems was carried out properly i performig attestatio egagemet? 9 (a) Whether proper systems ad procedures exist withi the PU to esure compliace with techical stadards? (b) If No, specify areas: Yes Yes No No (i) Accoutig Stadards icludig Iterpretatios thereof (ii) Auditig ad Assurace Stadards icludig Geeral Clarificatios thereof (iii) Statemets (iv) Guidace Notes (v) Istitute s Notificatios/ Directios (vi) Self Regulatory Measures 10 Whether overall presetatio of fiacial statemets coforms to statutory requiremets of presetatio uder various Statutes? 11 Whether audit coclusios draw are duly supported by audit queries/observatios? 12 Whether the quality of audit reports i respect of format ad cotet foud proper? Yes Yes Yes No No No

28 13 (a) Whether the Reviewer has issued prelimiary report? (if yes, please eclose copy ) Yes No (b) (c) Whether the prelimiary report issued by the Reviewer cotaied ay deficiecies? If Yes, please specify the areas of deficiecies Yes No NA. 14 (a) Whether PU has respoded to the prelimiary report?. (if yes, please eclose copy) (b) Whether the Reviewer is satisfied with the respose received from the PU? (if yes, please eclose copy) 15 If the Reviewer is ot satisfied with the respose of the PU, whether iterim report or qualified report has bee issued? Yes No NA Yes No NA Yes No NA 16 (a) Is the Fial Report qualified? Yes No NA (b) If Yes, specify the reasos.. 17 Whether the Reviewer received full co-operatio from the PU durig review?. Yes No 18 Is there ay poit which the Reviewer wats to brig to the otice of the Noard? If Yes, please elaborate separately. Yes No 19(a) Whether the PU obtaied / Procured ay professioal work icludig attest fuctios through process of tederig 19(b) If yes, the please attach sheet provided by PU i required format Yes No Yes No

29 Importat Poits to be take care of while preparig Review Report. 1 The report is submitted o the persoal letterhead, ot o Firm s letterhead. 2 The report is i the prescribed format as provided i the Peer Review Maual ad also hosted o ICAI website. 3 If ay help/service of a qualified assistat is used i the review, whether declaratio of Cofidetiality of that assistat was filed with the Peer Review Board. 4 The report is accompaied by: a. Duly filled i Aexure to Fial Report b. Copy of filled i Questioaire submitted by the Practice Uit to the reviewer, Both Parts- A & B c. Workig Papers maitaied by the reviewer for review ad iitial fidigs of review. d. If ay prelimiary Report is issued, that copy alog with Practice Uit s respose. e. List of cliets ad details of sample selected. f. Details about umber of days spet while coductig review ad work doe.

30 Importat Poits to be take care of while preparig Review Report. 5 The reviewer should categorically state i the Report his/her basis of Opiio. 6 The samples selected by the reviewer should be the proper represetative of the populatio. 7 The review should be completed withi the allotted timeframe. 8 The Period reported i the Peer Review Report should be same as directed by the Peer Review Board.

31 Peer Review Certificate The Board shall cosider the report ad if satisfied, issue Peer Review Certificate If ot satisfied, the Board may issue recommedatios to the PU ad direct the PU for follow-o review.

32 Thaks