Sr No

Particulars

Data

1

Total no of CA in India

More than 4.00 lakh

2

Members in Practice

Nearly 1.60 lakh * ( Nearly 40%)

3

Total No of CA firms in India

0.96 Lakh

4

Proprietorship CA Firm

0.75 Lakh ( Nearly 78%)

5

Total No of Partnership/LLP firms in India

0.24 lakh

6

NO of Partnership /LLP with more than 10 Partners

400

Total No of Active companies in India ( both Private & Public)

Approx 16.00 lakh

Total No of Listed Companies in India

Approx 0.06 lakh

% of Listed Companies

0.375%

No of Practising CA firms

96000

No of CA partnership Firms

24000

Standards on Auditing (SAs)

Key Checkpoints for Reviewer

SA 200- Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance with Standards on Auditing

• The reviewer should identify whether the Practice Unit has conducted the audit as per the Standards on Auditing.
• The reviewer should identify whether the auditor has exercised professional judgement and maintained professional skepticism through out the planning and performance of

the audit.

SA 210 Agreeing the Terms of Audit Engagements

• The reviewer should review the engagement letter and check whether the scope and roles and responsibilities have been clearly brought out.

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• The reviewer should verify whether the fees quoted in engagement letter is reasonable.

SA 220*- Quality Control

for an Audit of Financial Statements

• The reviewer should assess at the firm level

and at the engagement level, the quality control as required by this Standard.

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• The reviewer should access the leadership responsibilities for quality on audits, whether the practice unit follows relevant ethical requirements, whether the practice unit follows acceptance and continuance of client

relationships.

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• The reviewer should also access whether the engagement performance is being monitored.

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SA230 Audit Documentation

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• The reviewer should review the working papers of the Practice Unit to establish compliance by the practice unit with the technical, professional and ethical standards and to evaluate the work done and the conclusions reached.

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• The reviewer needs to verify whether the

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working papers are maintained for the period as specified in SQC 1 read with SA 230.

• The reviewer should ensure that the firm has adequate policies and procedures to ensure compliance with SA 230 in respect of assembly of file.
• The reviewer should verify whether the permanent file contains all the relevant information and whether the same is updated regularly to reflect the changes in the information contained in the file.
• The reviewer is also concerned with verifying that the procedures used by the Practice Units generate sufficient appropriate evidence to support the conclusions arrived at in relation to the assurance engagement being reviewed.

SA 240 The Auditor’s Responsibilities Relating to Fraud in an Audit of Financial Statements

• The reviewer should verify whether the auditor has inquired with the management, internal audit team and those charged with governance of any instance of actual or alleged fraud that has occurred in the past and obtain their respective views on the risk of fraud.
• The reviewer should verify whether the auditor has identified any unusual or unexpected relationship while performing analytical procedure and whether he has evaluated them to assess the risk of material misstatement due to fraud.
• The reviewer should verify whether the auditor has investigated any inconsistent responses from the management related to the inquiries.

SA 250 Consideration of Laws and Regulations in an Audit of Financial Statements

• The reviewer should verify whether the auditor has requested management and where appropriate, those charged with governance, to provide written representations that all known instances of non-compliance or suspected non- compliance with laws and regulations whose effects should be considered when preparing financial statements, have been disclosed to the auditor.

SA 260 Communication with Those Charged with Governance

• The reviewer should verify whether significant findings from the audit have been communicated to those charged with governance.
• The reviewer should verify whether the form, timing and expected general content of communications have been communicated to those charged with governance.

SA 265 Communicating Deficiencies in Internal Control to Those Charged with Governance and Management

• The reviewer should verify whether significant deficiencies in internal control identified during the audit have been communicated in writing to those charged with governance on a timely basis.

SA 300 Planning an Audit of Financial Statements

• The reviewer should verify whether the auditor has established an overall audit strategy that sets the scope, timing and direction of the audit, and guides the development of the audit plan.
• The reviewer should verify whether the auditor has planned the nature, timing and extent of direction and supervision of engagement team members and the review of their work.

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• The reviewer needs to verify whether the auditor has documented -
1. overall audit strategy
2. audit plans
3. significant changes made during the audit engagement to the overall audit strategy or the audit plan, and the reasons for such changes.

SA 315 Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and Its Environment

• The reviewer needs to verify whether the auditor has obtained an understanding of-
1. Relevant industry, regulatory, and other external factors including the applicable financial reporting framework.
2. The nature of the entity, including its operations, ownership & governance structures, types of investments that the entity is making, the way that the entity is structured and how it is financed.
3. The entity’s objectives and strategies, and those related business risks that may result in risks of material misstatement.
4. The measurement and review of the entity’s financial performance.

SA 320 Materiality in Planning and Performing an Audit

The reviewer shall verify whether the auditor has determined Materiality and Performance Materiality when planning an audit.

• The reviewer shall verify whether the auditor has documented the following-
1. Materiality for the financial statements as a whole
2. If applicable, the materiality level or levels for particular classes of transactions, account balances or disclosures

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3. Performance materiality
4. Any revision of (a)-(c) as the audit progressed.

SA 330 The Auditor’s Responses to Assessed Risks

• The reviewer shall verify whether the auditor has designed and performed further audit procedures whose nature, timing and extent are based on and are responsive to the assessed risks of material misstatement at the assertion level.
• The reviewer shall verify whether the auditor has designed and performed tests of controls to obtain sufficient appropriate audit evidence as to the operating effectiveness of relevant controls.
• The reviewer shall verify whether the auditor has documented the following-
1. overall responses to address the assessed risks of material misstatement at the financial statement level, and the nature, timing and extent of the further audit procedures performed;
2. linkage of those procedures with the assessed risks at the assertion level;
3. results of the audit procedures, including the conclusions where these are not otherwise clear.

SA450 Evaluation of Misstatements Identified During the Audit

• The reviewer shall review whether the auditor has accumulated misstatements identified during the audit, other than those that are clearly trivial.
• The reviewer shall review whether the auditor has communicated on a timely basis, all misstatements accumulated during the audit

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with the appropriate level of management, unless prohibited by law or regulation.

• The reviewer shall verify whether the auditor has documented the following-
1. The amount below which misstatements would be regarded as clearly trivial
2. All misstatements accumulated during the audit and whether they have been corrected
3. The auditor’s conclusion as to whether uncorrected misstatements are material, individually or in aggregate, and the basis for that conclusion.

SA 500 Audit Evidence

• The reviewer should review whether the auditor has obtained sufficient and appropriate audit evidence while performing his audit.
• The reviewer should verify the samples selected by the auditor for testing the sufficiency and appropriateness of the audit evidence.

SA 501 Audit Evidence— Specific Considerations for Selected Items

• The reviewer should verify whether the auditor has obtained sufficient and appropriate audit evidence regarding the following:
1. Existence and condition of inventory;
2. Completeness of litigation and claims involving the entity; and
3. Presentation and disclosure of segment information in accordance with the applicable financial reporting framework.

SA 505 External Confirmations

• The reviewer should verify whether external confirmations are sought as an audit evidence.

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• The reviewer should identify whether the auditor has obtained further audit evidence to resolve the doubts about the reliability of the response to a confirmation request.
• The reviewer should identify whether the auditor has performed alternative audit procedures to obtain relevant and reliable audit evidence in case of non-response to such confirmation request.

SA 510 Initial Audit Engagements – Opening Balances

• The reviewer should verify whether last year's audited financials and audit report are obtained by the auditor for verification of opening balances.
• The reviewer should verify whether the materiality of the opening balances relative to the financial statements for the current period have been identified by the auditor.

SA 520 Analytical Procedures

• The reviewer should identify whether the auditor has determined the suitability of particular substantive analytical procedures for given assertions, taking account of the assessed risks of material misstatement and tests of details, if any, for these assertions.
• The reviewer should identify whether the auditor has evaluated the reliability of data from which the auditor’s expectation of recorded amounts or ratios is developed, taking account of the source, comparability, and nature and relevance of information available, and controls over preparation.
• The reviewer should identify whether the auditor has developed an expectation of recorded amounts or ratios and evaluated whether the expectation is sufficiently precise to identify a misstatement that, individually or when aggregated with other misstatements,

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may cause the financial statements to be materially misstated.

• The reviewer should verify whether the amount of any difference of recorded amounts from expected values that is acceptable has been determined by the auditor.

SA 530 Audit Sampling

• The reviewer should verify whether the auditor has considered the purpose of the audit procedure and the characteristics of the population when designing an audit sample.
• The reviewer should identify whether the sample size selected by the auditor is sufficient to reduce sampling risk to an acceptably low level.
• The reviewer should verify whether the auditor has selected items for the sample in such a way that each sampling unit in the population has a chance of selection.

SA 540 Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures

• The reviewer should verify whether the auditor has made inquiries of management about changes in circumstances that may give rise to new, or the need to revise existing, accounting estimates.
• The reviewer should identify whether the auditor has obtained an understanding of how the management makes accounting estimates, and an understanding of the data on which they are based.
• The reviewer should verify whether the auditor has reviewed the outcome of accounting estimates included in the prior period financial statements, or, where applicable, their subsequent estimation for the purpose of the current period.

SA 550 Related Parties

• The reviewer should verify whether the auditor has made inquiries of management regarding-
1. The identity of the entity’s related parties, including changes from the prior period.
2. The nature of the relationships between the entity and these related parties
3. Whether the entity entered into any transactions with these related parties during the period and, if so, the type and purpose of the transactions.
• The reviewer should verify whether the auditor has identified and reviewed the related party transactions to ensure that those are in accordance with the applicable financial reporting framework.

SA 560 Subsequent Events

• The reviewer should verify whether the auditor has obtained an understanding of any procedure the management has established to ensure that subsequent events are identified.
• The reviewer should verify whether the auditor has inquired the management and, where appropriate, those charged with governance as to whether any subsequent events have occurred which might affect the financial statements.
• The reviewer needs to verify whether the minutes of meetings which have been held after the date of the financial statements have been obtained by the auditor and whether the auditor has inquired about matters discussed at any such meeting for which minutes are not yet available.

The reviewer needs to verify whether entity’s latest subsequent interim financial statements have been obtained by the auditor.

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SA 570 Going Concern

• The reviewer should identify whether the auditor is alert throughout the audit for audit evidence of events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern.
• The reviewer should identify whether the auditor has evaluated management’s assessment of the entity’s ability to continue as a going concern.

SA 580 Written Representations

• The reviewer should verify whether the auditor has obtained written representations from the management and, where appropriate, those charged with governance that they believe that they have fulfilled their responsibility for the preparation of the financial statements and for the completeness of the information provided to the auditor.

SA 610 Using the Work of Internal Auditors

• The reviewer should verify if the external auditor has determined whether the work of the internal auditors is likely to be adequate for purposes of the audit and the planned effect of the work of the internal auditors on the nature, timing or extent of the external auditor’s procedures.
• The reviewer needs to identify whether the external auditor has evaluated-
1. objectivity of the internal audit function
2. technical competence of the internal

SA 700 Forming an Opinion and Reporting on Financial Statements

• The reviewer should verify whether the financial statements are prepared, in all material respects, in accordance with the requirements of the applicable financial reporting framework.
• The reviewer shall review whether all the contents of the report are included in the Auditor's report.
• The reviewer shall verify whether key audit matters are communicated in the auditor’s report in accordance with SA 701 in case of audits of complete sets of general-purpose financial statements of listed entities.

SA 705 Modifications to the Opinion in the Independent Auditor’s Report

• The reviewer shall verify whether the auditor has modified the opinion in the auditor’s report if-
1. he concludes that based on the audit evidence obtained, the financial statements as a whole are not free from material misstatement; or
2. he is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements as a whole are free from material misstatement.

SA 706 Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report

The reviewer shall check whether the auditor has communicated with those charged with governance regarding the expectation to include Emphasis of matter paragraph and the wording of this paragraph

SA 710 Comparative Information—Corresponding Figures and Comparative Financial Statements

• The reviewer shall review if the auditor has evaluated whether the comparative information agrees with the amounts and other disclosures presented in the prior period.
• The reviewer shall review if the auditor has evaluated whether the accounting policies reflected in the comparative information are consistent with those applied in the current period or, if there have been changes in accounting policies, whether those changes have been properly accounted for and adequately presented and disclosed.

SA 720 The Auditor’s Responsibility in Relation to Other Information in Documents Containing Audited Financial statements

• The reviewer shall review if the auditor has made appropriate arrangements with management or those charged with governance to obtain other information prior to the date of the auditor’s report.
• The reviewer shall identify whether the auditor has determined any material inconsistency in relation to such other information and check whether the audited financial statements or the other information needs to be revised.

SA 800 Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks

• The reviewer shall identify whether the auditor has obtained an understanding of the following-
1. The purpose for which the financial statements are prepared;
2. The intended users; and
3. The steps taken by the management to determine that the applicable financial reporting framework is acceptable in the circumstances.

SA 805 Special Considerations—Audits of Single Financial Statements and Specific elements, Accounts or Items of a Financial Statement

• The reviewer shall review whether the auditor has complied with all the SAs relevant to the audit.

SA 810 Engagements to Report on Summary Financial Statements

• The reviewer shall review whether before accepting an engagement to report on summary financial statements, the auditor has-

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a) determined whether the applied criteria are acceptable

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b) obtained agreement of management that it acknowledges and understands its responsibilities

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c) agreed with management the form of opinion to be expressed on the summary financial statements.

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• The reviewer shall review if the auditor has evaluated whether the summary financial statements adequately disclose their summarised nature and identify the audited financial statements.

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• The reviewer shall review whether the summary financial statements obtained by the auditor adequately disclose the applied criteria.

Sl. No

Particulars

Y/N/NA

Remarks

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Technical Standards

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1

Obtain the years of professional experience in practice

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2

Understand the field of expertise of such PU

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3

Whether the PU complies with the Accounting

Standards issued by ICAI while performing the audit of its clients

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4

Whether the Secretarial Standards issued by Institute of Company Secretaries of India have been complied with wherever necessary

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5

Whether Framework for the preparation and presentation of Financial Statements are followed by the PU

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6

Whether Standards on Auditing, Standards on Assurance Engagements, Standards on Quality Control and Guidance Notes on related services have been complied with by the PU

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7

Whether the relevant notifications/directions issued by ICAI have been considered by the PU

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8

Whether the samples collected by the PU are sufficient and appropriate to draw conclusions or provide an opinion

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9

Whether material facts are appropriately being disclosed by PU in case of any Audit clients

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10

Whether working papers are properly maintained by the PU and process adopted for sharing the same with any external parties

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11

Whether going concern assumptions have been appropriately considered by the PU in the engagements wherever relevant

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Ethical Standards

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1

Understand the qualification of the PU

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2

Whether the internal policies and practices of the PU adhere to the Code of Ethics issued by ICAI

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3

Obtain the list of policies or safeguards followed by the PU to protect themselves from the threat to its Independence

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4

What steps are followed by the PU to comply with professional ethics such as integrity, confidentiality, objectivity etc.

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5

Whether the PU has any other business relationship with the clients other than ordinary business relationship

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6

Understand whether PU has been alleged with professional misconduct at any point in his professional career

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7

Whether the PU or his relative have any substantial interest in the audit clients or officers of such clients which affects the Independence of the PU

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8

Determine whether any long-term association with any of its client has been established which might pose a threat to its independence

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9

Instances wherein the PU has withdrawn from the engagements to protect its independence

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10

Whether the number of audit clients are within the limits specified under Companies Act and the guidelines provided by ICAI

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11

In case of new client, ensure if NOC has been obtained by the PU from the outgoing auditor of such companies

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12

Understand the practices followed while referring the assignments to external experts

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13

Check if the PU has accepted any audit assignment wherein there was unjust removal of earlier auditor or where the auditor’s fees was withheld by the company

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14

Check whether at any point of time the PU has

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accepted the fee which is below the minimum scale of fees recommended by ICAI

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15

Check if PU, being a statutory auditor has rendered any negative listed service provided under Section 144 of the Companies Act 2013 to any of its audit clients

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16

Whether the website of the PU is in line with the requirements of Institute's guidelines/ directions

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17

Whether the PU is complying with the requirements of Quality Review Board

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18

The process and approach followed by the PU in terms of client approach to understand if any solicitation of work is involved

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19

Understand whether proper care and diligence has been exercised before performing any attestation services

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20

In case any client has advanced money to the PU to be spent on their behalf (such as TDS payment, advance tax payment) whether such amount has been kept/accounted separately by the PU

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21

Whether the PU in indebted to any of its audit clients for an amount exceeding INR 1,00,000

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22

How does PU maintain confidentially, safe custody and retrievability of engagement documents

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23

What measures and actions are taken by the PU in case of conflict of Interest (either within the partners or with the clients)

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24

In case the Financial Statements are prepared by PU, this may lead to self-review threat. Obtain the measures undertaken to overcome

the same

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25

Whether there has been any acceptance of gifts/hospitality which leads to self-interest in the clients

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AS-1 - Disclosure of Accounting Policies

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1

Whether all the significant accounting policies have been disclosed at one place and as a part of the financial statements.

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2

If there is any change in the accounting policies whether it has been disclosed separately with quantification of its impact on financial statements.

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3

Whether the fundamental accounting assumptions i.e. going concern, consistency or accrual been followed.

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4

If not, has the fact been disclosed.

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AS-2 - Valuation of Inventories

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1

Check whether accounting policies adopted in measuring the inventories, including the cost formulae used have been disclosed.

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2

Whether all inventories been valued at the lower of cost and NRV.

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3

Does the financial statements disclose the following:

1. the accounting policies adopted in measuring inventories, including the cost formula (e.g., FIFO) used; and

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• the total carrying amount of inventories and

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its classification appropriate to the enterprise.

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AS-3 - Cash Flow Statements

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1

Ensure that a cash flow statement of the current year is prepared and cash flows are

classified as operating, investing and financing

activities.

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2

Whether the enterprise has reported cash flows from operating activities using direct or indirect method.

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3

Whether cash flows from transactions in a foreign currency recorded by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the cash flow.

(A rate that approximates the actual rate may be used if the result is substantially the same as would arise if the rates at the dates of the cash flows were used.)

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4

Check whether the cash flows associated with extraordinary items been classified as arising from operating, investing and financing activities as appropriate and separately disclosed.

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5

Whether non cash investing and financing transactions been excluded from cash flow statement.

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AS-4 - Contingencies and Events Occurring After the Balance Sheet Date

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1

Whether the contingencies mentioned below

have been taken into consideration:-

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• Warranties and claims
• Disputed income tax, GST or other taxes/ duties
• Claims against the company not acknowledged as debts
• Bills discounted etc.

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2

Have assets and liabilities been adjusted for events occurring after the balance sheet date that provide additional evidence to assist the estimation of amounts relating to conditions existing at the balance sheet date.

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3

Check whether it is ensured that no contingent gains have been recognized in the financial statements.

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4

Does any event after the balance sheet date indicates that the fundamental accounting assumption of going concern is not appropriate. If so, have assets and liabilities been adjusted.

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AS-5 - Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies

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1

Are the prior period income/expenses disclosed separately in the profit & loss account in a manner that their impact on the current profit / loss is perceived clearly.

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2

Has there been any extraordinary event occurring during the reporting period. Is it disclosed separately in the profit & loss account so as to understand its impact.

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3

Is there any change in accounting estimate which has material financial impact either in the current period or in future periods.

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4

Whether the effect of change in accounting estimate disclosed properly as mentioned in AS

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5

Is there any change in accounting policy. If yes, then whether the material impact is disclosed in the financial statements.

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AS-7 - Construction Contracts

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1

Does the same method of accounting (percentage of completion method or the completed contract method) been used for all construction contracts that meet similar criteria.

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2

Does the profit in the case of fixed price contracts been recognized only when the work has progressed to a reasonable extent.

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3

Whether the enterprise has disclosed the following assets:

1. the gross amount due from customers for contract work as an asset? and
2. the gross amount due to customers for contract work as a liability?

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4

Whether the enterprise has disclosed any contingencies in accordance with AS 29- Provisions, Contingent Liabilities and Contingent Assets. e.g., warranty costs, penalties or possible losses?

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AS-9 - Revenue Recognition

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1

Have you ensured that revenue is recognized only when there is certainty to its collection

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2

Check whether the revenue from a sale been recognized when all the following conditions are satisfied:

(a) The property in the goods has been

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transferred for a price or all significant risks and rewards of ownership have been transferred to the buyer, and the seller retains no effective control of the goods to a degree usually associated with ownership.

2. There exists no significant uncertainty regarding the amount of the consideration derived from the sale.
3. It is not unreasonable to expect ultimate collection of the consideration

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3

Have you ensured the following in case of performance in rendering of services:

1. Method of recognizing revenue is either completed service contract method or proportionate completion method.
2. There is no significant uncertainty regarding amount of consideration

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4

Whether revenue arising from royalty, interest and dividend is recognized when there is no significant uncertainty as to measurability and

collectability

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5

Check whether a provision has been made to reflect the uncertainty where uncertainty relating to collectability arises subsequent to recognition

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AS-10 - Property, Plant and Equipment

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1

Is there a list of fixed assets. If so, is there is a fixed asset register. Is the register updated. Ensure that the items included in the register are the assets of the company and not for sale

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2

Have the stand-by equipment and servicing equipment been capitalized

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3

Check whether the following been included in the cost of fixed assets:

1. Purchase price (including import duties and other non-refundable taxes or levies and excluding trade discounts and rebates); and
2. any attributable cost of bringing the asset to its working condition for its intended use

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4

Check whether the following fixed assets been eliminated from the financial statements:

1. those disposed of; and
2. those from which no further benefit is expected from use and disposal

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5

Check whether revaluation is justified. Is it applied to the entire lot of assets. If not, is the selection systematic. The basis should be disclosed

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6

Check whether goodwill been recorded only when paid for in:

1. money, or
2. money's worth or
3. on acquisition of business where consideration exceeds the value of net assets

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7

Check whether on disposal/retirement of fixed assets carried at cost, any resulting gains or losses been transferred to the profit and loss

account

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8

Check whether depreciation is provided as per Schedule II of the Companies Act 2013 and if there is any deviation, proper disclosures as required is given

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AS-11 - The Effects of Changes in Foreign Exchange Rates

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1

Whether initial recognition of foreign currency transaction has been made at the rate as on the transaction date

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2

Whether following rules have been followed for recognition on Balance Sheet date:

1. Foreign currency monetary items should be shown at closing rate
2. Non-monetary items, carried at historical cost should be reported at spot rate
3. Non-monetary items, carried at fair value should be reported at the rate when the valuation was done

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3

In case a rate other than that at the transaction date is used (e.g. average rate for a week or a month) does it approximate the actual rate

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4

Has the net exchange difference arising on translation of items in the financial statements been recognized as income or as expense for the period, except to the extent adjusted in the carrying amount of fixed assets

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AS-12 - Accounting for Government Grants

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1

Whether grant in non-monetary asset form have been recognized at cost or nominal value

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2

In case a government grant has characteristics similar to those of a promoter’s contribution, has it been credited to the capital reserve.

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3

Whether proper treatment of grants for depreciable or non-depreciable assets has been followed

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4

In case of grant for specific asset, grant is shown as deduction from cost of asset or not

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5

Whether the contingency or refund, if any have been recognized as per AS-4 and AS-5 respectively

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6

Whether following disclosures have been made:

1. Policy adopted for grants
2. Method of presentation
3. Nature and extent of grant recognized

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AS-13 - Accounting for Investments

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1

Ensure that investments are classified as long- term investments and current Investments

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2

Have acquisition charges (such as brokerage, duties and fees) been included in the cost of the investments

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3

If yes, has the fair value of such shares or securities been taken as the cost of acquisition

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4

Has any investment been acquired by way of exchange for another asset

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5

If yes, has the fair value of the asset given up or investment acquired been taken as the cost of acquisition

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6

Have all changes in carrying amount of investments been taken to the profit and loss account

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7

Have gains or losses on disposal of investments been taken to the profit and loss account

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AS-14 - Accounting for Amalgamations

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1

Check in case there has been an amalgamation during the year, determine whether it is an amalgamation in the nature of merger i.e. does it satisfy all five conditions stipulated in this regard

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2

Whether pooling of interest method is used in case of amalgamation in the nature of merger

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3

Whether purchase method is used in case of amalgamation in the nature of purchase

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4

When non cash elements are included in the consideration paid, whether they have been considered at fair value

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5

Where the scheme of amalgamation sanctioned under a statute prescribes the treatment to be given to the reserves of the transferor company after amalgamation, has this been followed

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6

When an amalgamation is effected after the balance sheet date but before the issuance of the financial statements of either party, whether disclosure is made in accordance with AS-4

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AS-15 - Employee Benefits

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1

Has the PU obtained the list of employee benefits provided by the client

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2

Whether PU has obtained the grouping of defined benefits into defined contribution plan or defined benefit plan

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3

Whether any termination benefit is paid or payable during the year and is recognized as an expense

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4

Whether the classification of employee benefits into long term, short term, retirement or post retirement employee benefits appropriately captured

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5

Whether the PU has considered/obtained the actuarial valuation reports as on Balance sheet date

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6

Whether the accounting for ESOP complies with the guidance note issued by ICAI

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7

Whether the Financial Statements disclose all the facts as required under the Standard

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AS-16 - Borrowing Cost

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1

Whether due care has been taken by the PU in identifying the qualifying asset

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2

Whether borrowing costs which are directly attributable to acquisition, construction or production of qualifying assets have been capitalized

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3

Whether there is any income arising from temporary investment of such borrowing and the same has been deducted from borrowing cost

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4

Whether due care has been applied in accepting the capitalization rate considered by the client to determine the borrowing costs

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5

Whether capitalization of borrowing cost suspended during the period when active development is interrupted without any technical or administrative reason

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6

Has capitalization of borrowing cost ceased when substantially all the activities relating to the asset are completed

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7

Whether disclosure of accounting policy adopted, and the amount of borrowing cost capitalized during the year has been appropriately considered

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AS-17 - Segment Reporting

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1

Whether primary and secondary segment reporting formats been identified correctly

​

​

2

Whether the segment revenue includes only that portion of enterprise revenue which is directly attributable to a segment or portion of revenue attributable to particular segment or revenue from transactions with other segments

​

​

3

Whether identification of amounts with particular segment is appropriately made to measure the segment revenue, segment expense, segment assets and liabilities of reportable segments is done

​

​

4

Whether proper disclosures of primary and secondary activities have been considered by the PU

​

​

​

AS-18 - Related Party Disclosures

​

​

1

Whether the PU has obtained the list of related party details which is signed by the client

​

​

2

Has the PU co related the transaction recorded in the register maintained u/s 189 of Companies Act, 2013

​

​

3

Whether the disclosure requirement under this Standard has been considered by the PU

​

​

​

AS-19 – Leases

​

​

1

Has the PU verified the lease agreement which transfers the right to the client to use the assets

​

​

2

Ensure whether depreciation has been appropriately provided

​

​

3

Whether lease income and expenses from operating lease recognized in the Profit and Loss account on a straight-line basis over the lease term

​

​

4

Whether the disclosure requirement under this Standard has been considered by the PU

​

​

5

Whether any finance lease has been identified and if so proper treatment as required under AS is given in the Financial Statements

​

​

​

AS-20 - Earnings per Share

​

​

1

Whether the PU has applied due care in verifying weighted average number of shares for the purpose of determining EPS

​

​

2

Whether basic and diluted EPS has been presented on the face of Statement of Profit and Loss account and the figures are appropriate

​

​

3

In case of dilutive EPS, whether adjustments to the net profits have been properly considered

​

​

​

AS-21 - Consolidated Financial Statements

​

​

1

Has the PU obtained the list of associate/subsidiary/joint venture from the client

​

​

2

Whether the PU has considered the consolidated financial statements in case the client has either an associate/subsidiary/joint

​

​

​

venture

​

​

3

Whether the reasons for not consolidating either an associate/subsidiary/joint venture been disclosed in the consolidated financial statements

​

​

4

Whether the pre and post incorporation profits have been calculated considering all the facts

​

​

5

Whether the adjustment for minority interest has been given correctly

​

​

6

Has the inter-group holding adjustments and the elimination on intergroup unrealized profits been appropriately considered

​

​

7

Whether the disclosure requirements have been complied accordingly

​

​

​

AS-22 - Accounting for taxes on Income

​

​

1

Has the PU ascertained the timing differences and permanent differences

​

​

2

Has the PU verified the deferred Tax calculations provided by the client

​

​

3

Whether the PU has verified that deferred tax asset has been recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized

​

​

4

Whether the entity has a legally enforceable right to set off assets against liabilities representing current tax

​

​

5

Whether the presentation and disclosure as provided by the Standard been complied with

​

​

​

​

​

​

​

AS-23 - Accounting for Investments in Associates

​

​

1

Whether the list of associates signed by the client been obtained by the PU

​

​

2

Whether goodwill/capital reserve been computed on the investment in an associate as the difference between cost of acquisition & the

entity's share of the equity of the associate and adjustments have been provided accordingly

​

​

3

Has the gross share of profit and loss attributable to the holding company been debited or credited to holding company's profit and loss account

​

​

4

Whether disclosure requirements have been complied accordingly

​

​

​

AS-24 - Discontinuing Operations

​

​

1

Whether PU has obtained the list of major line of business or operation which have been discontinued

​

​

2

Whether the PU has measured the changes in the assets, liabilities, revenue and expenses relating to discontinuing operation as set out in other Accounting Standards

​

​

3

Whether prior period figures restated to segregate assets, liabilities, revenue, expenses and cash flow of continuing and discontinuing

operations as disclosed in current year

​

​

​

AS-25 - Interim Financial Reporting

​

​

1

Whether the PU has obtained the understanding if the client is required to

​

​

​

prepare and present interim financial reports by regulatory authorities

​

​

2

Whether the client has applied the same accounting policies in its interim financial statements as are applied in its last annual financial statements

​

​

3

Whether presentation and disclosure as required under the Standard has been complied with

​

​

​

AS-26 - Intangible assets

​

​

1

Whether the recognition criteria have been verified by the PU

​

​

2

Ensure that the internally generated goodwill is not considered as asset

​

​

3

Whether the treatment of expenses incurred during research and development phases has been accordingly treated in the books of accounts

​

​

4

In case the expenditure incurred during the development stage has been capitalized, whether all the conditions are demonstrated on every Balance sheet date. If any of the conditions is not satisfied, whether the same has been charged to Profit and Loss account

​

​

5

Whether the accounting treatment is in line with the Standard

​

​

6

Whether the disclosure requirements on life, depreciation method etc. have been complied with accordingly

​

​

​

​

​

​

​

AS-27 - Financial Reporting of Interest in Joint Ventures

​

​

1

Whether the PU has obtained the agreement between two or more parties to undertake an economic activity under joint control

​

​

2

Whether proper adjustments with regard to joint venture have been made in the books of accounts of the client

​

​

3

Whether disclosure requirements have been complied with accordingly

​

​

​

AS-28 - Impairment of Assets

​

​

1

Whether the PU has obtained any explanation with regard to indication on impairment of an asset as on Balance sheet date

​

​

2

Has the determination of net selling price been verified by the PU

​

​

3

Whether there is any reversal of impairment of assets

​

​

4

Whether the accounting treatment of impairment loss has been verified

​

​

5

Whether there is revaluation of impaired asset

​

​

​

AS-29 - Provisions, Contingent Liabilities and Contingent Assets

​

​

1

Whether the conditions for creating provisions been tested by PU

​

​

2

Whether PU has verified if any liability has been disclosed as provision

​

​

3

Whether proper disclosures for contingent liability have been made in the financial statements

​

​

Title

Information Contained

Engagement

• Letter of engagement
• Correspondence with retiring auditor (NOC)

Constitution

• Copies of Memorandum and Articles of Association in case of corporate entities or
• Partnership agreement in case of partnership firm or Act, Regulation, byelaws, trust deeds, as applicable under which the entity functions

Background and Organisation Structure

• Nature and history of the business
• Profile of ownership
• Registered office details
• Management structure including organisation chart
• Industry specification with reference to client's size, economic factors affecting the industry, seasonal fluctuations and demands

​

• Facility locations, plant capacity, owned or leased, age, capital expenditure budget, etc. Products specifying diverse range along with classification
• Purchase volumes, main suppliers, policies
• Inventory norms, inventory levels during last five years and related ratios.
• Sales volumes including exports, main customers, methods of distribution, pricing policies, credit policy
• Personnel showing numbers, analyses by departments or function, method of remuneration, contracts, union agreements, HR policy
• Copy of audited financial statement for previous five years, if it exists.
• Study and evaluation of internal controls
• Significant audit observations of past
• Statistical information showing 5 years

comparison of performance indicators (major accounting ratios) Industry statistics

Systems (for larger Audits, this section could be held on a separate file)

• Details of methods of accounting including cost accounting, flow charts, specimens of accounting documents, code structure and list of accounting records
• EDP-systems security, source code security, authorisation and back up policy

Contracts, agreements, Minutes

• Leases agreements photocopies/ extracts of the same
• Title deeds inspected annually by auditor
• Royalty agreements
• Minutes of continuing importance such as Directors' meeting, Members' meeting

Group

• Group structure - subsidiaries, associates
• Joint venture

​

• Names of auditors

Other professional advisor's list

• Bankers
• Solicitors
• Investment Analysts
• Registrars
• Credit Rating Agency

Miscellaneous

• Details of other client information of a permanent nature

Title

Information Contained

Engagement

• Acceptance of annual reappointment

Accounts

• Copy of draft financial statement
• Copy of final signed financial statement

Reports and Final Papers

• Copies of all draft and final reports issued to client
• Correspondence with other auditors and experts
• Comments received from client and letter of representation
• Observations on accounts and points carried forward to next year
• Final journal entries
• Company accounts checklist - directors' report
• Audit completion report

Audit Plan

• Planning programme
• Time and cost summary
• Briefing notes
• Copy of planning letter to client
• Points carried forward from previous year

Balance sheet, statement of profit and loss account and cash flow statement audit – systems testing

• Lead schedules/ Notes
• Audit programmes
• Detailed working papers and conclusions
• Company accounts and Accounting Standard, if any, checklists

​

• Queries raised and explanations received
• Third party confirmations and certificates
• Weaknesses identified and copy of letter of weaknesses sent to client

Accounts preparation

• Schedules/ Notes
• Trial balance
• Cross-reference to audit work performed

Audit Programme

• Audit procedure (compliance and substantive)
• Detailed working papers and conclusions
• Queries raised and explanations received

Extracts from minutes relating to accounting

• Directors' meetings
• Members' meetings
• Audit committee meetings
• Investment and other Board committee meetings

Statistical information

• Performance indicators collected which have a bearing on the
• Extent, nature, timing of substantive tests
• Analytical review, comments and observations

Sr No

Particulars

YES/NO/NA

REMARKS

Page number of Hard Copy

file

Electronic Copy reference

MASTER DATA/DOCUMENTS

1

Audit engagement letter(with reference to SA 210)

​

​

​

​

2

Opening and closing trial

balance

​

​

​

​

3

Last year signed

financial statement

​

​

​

​

4

List of various registrations obtained under

other laws

​

​

​

​

5

List of Branches

​

​

​

​

6

List and place of books maintained

​

​

​

​

7

Loan payment

sch. & loan confirmation letter

​

​

​

​

8

Cash balance confirmation letter along with Denomination

​

​

​

​

9

Bank balance confirmation

​

​

​

​

10

Outstanding entry

passed – provide supporting

​

​

​

​

​

photocopy

​

​

​

​

11

Draft financial statement

​

​

​

​

12

Management representation letter

​

​

​

​

DIRECT TAX REPORTING

Copy of

computation of income of last year

​

​

​

​

​

Summary of disallowances to be made and allowances as per section 43b of I T

Act

​

​

​

​

​

Deferred tax working

​

​

​

​

​

Form 26AS/AIS

​

​

​

​

​

Advance tax payment challans

​

​

​

​

​

Invoice of addition to fixed assets

​

​

​

​

​

Invoice of sale of fixed assets

​

​

​

​

​

TDS payments challans

​

​

​

​

​

Cash Ledger with

transaction more than Rs. 10,000/-

​

​

​

​

​

Status of pending income tax assessment

​

​

​

​

​

Certificate under sec. 40(A)(3) & 269SS, 269ST &

269T Of Income Tax

​

​

​

​

List of parties covered under section40 A 2(b) with relations and transactions

​

​

​

​

TDS details as per Clause 34

​

​

​

​

Quantitative Details

​

​

​

​

INDIRECT TAX REPORTING

​

Applicability of

GST

​

​

​

​

Applicability of

Customs

​

​

​

​

Respective returns copy

​

​

​

​

Respective challans copy

​

​

​

​

Respective order status, if any

​

​

​

​

Reconciliation statement of turnover declared and booked,

wherever required

​

​

​

​

COMPANY LAW

​

Shareholding pattern

​

​

​

​

​

List of Directors

​

​

​

​

​

List of KMP

​

​

​

​

​

Register extracts of transactions

with related parties

​

​

​

​

​

Minutes of meetings

​

​

​

​

​

List of related parties as Per As18

​

​

​

​

​

Ledger of related party from tally having transaction

​

​

​

​

​

Calculation of foreign exchange profit/loss

​

​

​

​

​

41

Representation from Director for Qualification

​

​

​

​

42

Any change in

MOA/AOA

​

​

​

​

43

Copy of annual return filled with MCA

​

​

​

​

44

Calculation of director remuneration as per Companies Act

​

​

​

​

45

CSR –

Applicability and its compliances

​

​

​

​

46

Cash flow

statement by other than small and one person

company

​

​

​

​

47

Consolidated financial statement preparation applicability

​

​

​

​

48

Internal financial controls policy and monitoring process

​

​

​

​

49

Schedule II – Depreciation Useful life if not the same technical

report

​

​

​

​

50

KMP appointment and its

compliances

​

​

​

​

51

Directorship list – appointment or disqualification if any

​

​

​

​

52

Independent director and/or

women director

​

​

​

​

53

Deposits repayment other than directors (Compliance of Section 73)

​

​

​

​

54

Annual return extracts – MGT 9

​

​

​

​

55

Number of meetings by BOD (OM, EOM, BM) and its minutes

​

​

​

​

56

Vigil mechanism

​

​

​

​

57

List of contracts or

arrangements with related parties

​

​

​

​

58

Various

Committees to be formed

​

​

​

​

59

Interest by directors

​

​

​

​

60

Various Forms filed with ROC

​

​

​

​

61

Corporate Governance

​

​

​

​

62

Secretarial Audit Requirement or Compliance Certificate from

Practicing CS

​

​

​

​

63

Charge creation /

Modification / Satisfaction

​

​

​

​

64

Compliance with Section 185/186

​

​

​

​

COMPLIANCE UNDER ALLIED LAWS

​

65

PF payment challans and returns copy, if

any

​

​

​

​

66

Profession tax payment challans and returns copy,

if any

​

​

​

​

67

ESIC payment challans and returns copy, if

​

​

​

​

​

any

​

​

​

​

68

LWF payment challans and returns copy, if

any

​

​

​

​

69

SEBI Compliances

​

​

​

​

70

MSME

Compliances

​

​

​

​