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Audit Evidence

Lakshmi (Student) (1836 Points)

07 December 2010

There are various factors which influences the auditor's judgement as to what is sufficient and appropriate audit evidence.

One among them is:

The experience gained during previous audits.

My question is that if the auditior is auditing the books of the client for the first time then how will hw have the experience gained during the previous audit. Will it effect him in decision making??

Pls help me...

Thank you..

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9 Replies

Devendra (Chartered Accountant) (4775 Points)
Replied 07 December 2010

Dear Lakshmi,

If the auditor is conducting the audit of the client for the first time then, he will have to refer to:-

1) Previous Year Annual Report of the client

2) Discussion with the previous auditors, legal advisors, company secretary etc.

3) Audit working papers and other relevant documents of the previous auditor.

4) Discussion with the Higher Management and the Internal Auditors.

5) Review of the Statutory and Internal Audit Reports.

7) Review of the Tax Returns, Financial Statements (Balance Sheet, Profit and Loss A/c and other relevant Schedules)

8) Visiting the place of work of the client.

Thus, when the auditor is doing audit for the first time he can take help of the people mentioned above to gather the relevant information to express his views on the Financial Statements of the Organisation.

Regards,

Devendra P Kulkarni

2 Like

Lakshmi (Student) (1836 Points)
Replied 07 December 2010

Thank you..

CMA. CS. Sanjay Gupta ("PROUD TO BE AN INDIAN") (114215 Points)
Replied 07 December 2010

Dear,

Even if you are auditing the client for the first time the experience of earlier audit will help you. It will help you in decision making, but the preactices followed by the two clients may be different so you need to have a broader outlook. Analyse the system of client and then set any benchmark. If you are audint for the first time then you will not have advantage of this aspect.

Regards

2 Like

Devendra (Chartered Accountant) (4775 Points)
Replied 07 December 2010

Also refer SA 310 Knowledge of Business in your Auditing Module.

Regards

Devendra

(Guest)

ya agree with devendra

1 Like

Santhosh Poojary (SIEMPRE AHÍ PARA TI) (15607 Points)
Replied 07 December 2010

Very Well Explained by Devendra & Sanjay Sir

Thanks

1 Like

CS LLB Pulkit Gupta (https://www.facebook.com/pages/Life-and-Promises/553962034682487) (16631 Points)
Replied 08 December 2010

Originally posted by : SAN...
	Very Well Explained by Devendra & Sanjay Sir Thanks

Manish Sharma (nil) (28 Points)
Replied 18 January 2015

But all the matters are entirely diffrent with bank audit . in this we have to take a look in variety of matter although chances of audit evidence found are negligible due to core banking solution for e.g drawing power is being feeded in system so auditor hasto go through with it. and drawing will be calcuated as stock-creditors+debtor-margin.