Page 115 - Connect 2 Impact Souvenir Flip Book

Member Articles

Documenting Professional

Skepticism

• How were management views and assumptions
challenged before accepting these?
• Unusual, one-time transactions and related business
rationale.
• Complete record of discussions, including areas of
CA Surya Narayanan Krishna Moorthy uncertainty.
• Assessment of reliability of the source of documents.
• Anything concerning significant matters.
MEANING
Collecting audit evidence and objectively evaluating CERTAIN IMPORTANT CIRCUMSTANCES
it, considering its competency and sufficiency, with • Probing questions and management responses e.g.,
utmost good faith and integrity requires professional understanding controls.
skepticism - “an attitude that includes a questioning • Identified or suspected non-compliance with
mind, being alert to conditions that may indicate regulations.
possible misstatement due to error or fraud, and a • Reasonableness of accounting estimates.
critical assessment of audit evidence”, as this rests on • Identified information that is inconsistent with the
due professional care. final conclusion regarding a significant matter.
WHAT SHOULD BE DOCUMENTED? • Reasonableness of areas of subjective judgements.
• The thought process, alternative views considered, • Adequacy of disclosures.
and changes to audit approach.
• Basis for conclusions about the authenticity of a
SOME EXAMPLES OF EVIDENCE document.

PROCEDURE DOCUMENT
• Identifying specific line items in the financial statements that • Risk assessment checklist.
are susceptible to the risk of material misstatement due to
fraud or error
• Evaluating and challenging reasonableness of management • Accounting estimates review
assumptions memorandum
• Determining whether changes in the estimates are appropriate
• Reviewing judgments made by management to identify bias
indicators
• Evaluating management plans for future actions • Going concern review
memorandum

www.icaidubai.org 115

#SharingKnowledge #CreatingGoodwill 40 TH Conference 2022 40 TH Conference 2022 #SharingKnowledge#CreatingGoodwill
Annual International
#SharingKnowledge #CreatingGoodwill
Annual International
#SharingKnowledge#CreatingGoodwill
Souvenir
Souvenir