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CA Final - SRE / SAE / SRS (Comparison & Sufficient for Exam Notes)

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SRE 2400 SRE 2410 SAE 3400 SAE 3402 SAE 3420 SRS 4400 SRS 4410
Review Historical FS Review of IFI Assurance Assurance Assurance Proforma Agreed procedure : Compilation
Prospective FI Control at SO FI in Prospectus FI engagement
Historical Other than Historical Info Agreed Procedure
Practitioner Independent Independent Independent Practitioner Auditor Practitioner
(not auditor) Auditor Auditor Auditor (Practitioner)
Not main auditor of FS Main Auditor of Not necessary to be a Main auditor of FS Not necessary to be entity main auditor
FS of FS
Limited Assurance Limited Limited Reasonable Reasonable assurance NO Assurance NO Assurance
Assurance assurance assurance
Independence Require Independence Independence Independence Independence NOT REQUIRE NOT REQUIRE

EXACT SAME : EXACT SAME :

Engt level Quality Engt level Q.C:
control: (Engt Partner is
(Engt Partner is responsible for)
responsible for)
• Firm QC policies
• Firm QC policies • Engt Quality
• Engt Quality • Direction
• Direction supervision supervision
• Appropriate Report • Appropriate
Report

Consider factor before accepting engagement:

• Rational purpose of • period covered A) Determine • Practitioner
engt by info. whether: capability &
• Review engt is • elements to be • capabilities and competence.
appropriate included in competence • Criteria is suitable
info; [i.e., • Wording of opinion

11.1 | P a g e Chp 11: SAE 3400, 3402, 3420

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• Preliminary Asset, etc.] • Criteria suitable • Source of

understanding indicates • The intended & will be available unadjusted FI ➔
→ info needed for use of info; to UE & their audited or review &
review is Unavailable • Whether info auditor Modified opinion on
• Mngt imposed will be for • scope not be so it, consider
Limitation general or limited whether or not the
• Doubt on mngt limited relevant L&R
integrity distribution; B) SO Acknowledge permits the use
• Ethical requirement not • nature of the it’s • If historical FI has
satisfied assumptions, responsibility: never been
whether they audited/reviewed,
are best- • For preparation consider whether
estimates or of the practitioner can
hypothetical description of its obtain a sufficient
assumptions; system understanding of
• stating in SO’s the entity
assertion the • In case of
criteria it used acquisition → the
• For stating in the acquiree’s historical
description of its FI has never been
system audited → can
✓ Control obtain a sufficient
objective understanding of
✓ Where they the acquiree ?
are specified • RP that it
by L&R, or acknowledges and
another party understands its
• Provide Auditor responsibility for:
with: (exactly same as
✓ Access to all Pre-Conditions as
info per SA 210 i.e.,
✓ Additional info preparing PFI,
✓ Unrestricted providing all info,
access additional info etc.)
Terms of Engagement
(IMP) (IMP) (IMP)

11.2 | P a g e Chp 11: SAE 3400, 3402, 3420

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Preconditions: • Nature of engt • Nature of • Intended use and

• FRF is acceptable • Objective & engagement (Not distribution of FI
• Mngt respon: Scope of audit/review) • Identification of
✓ FS prepare review • Purpose of applicable FRF
✓ I.C for FS • Mngt Engagement • Objective &
✓ Provide info to responsibility • identify FI of AUP Scope of CE
auditor (All Info, for • NTE of procedures • Practitioner
additional, • Auditor’s • Limitation on responsibility
unrestricted access) responsibility report use • Mngt
• Form & Responsibility:
content of Include: ✓ FI Preparation
report • Listing of ✓ I.C for FI
• review report procedures ✓ Accuracy &
includes • Statement that Completeness
distribution of of record
report is restricted ✓ Judgement for
preparing FI
• Expected form &
content of report
Engagement Performance:
Procedure for Review: Understand the NTE of (NOT Important) Procedure & Performing Engt:
Entity to: Examination • assess suitability of evidence:
For SAAE, design & • Obtain
Procedure will applicable criteria
Perform Inquiry & 1) Identify type (ICI – OR) Understanding
be determined • consider
Analytical procedure to: of potential (Entity Business,
based on: materiality
a) Address all Material MMS, Or, • Inquiry, Acc System /
• obtain an
item 2) Select • Confirmtion, FRF)
a) knowledge understanding of
b) Focus on area likely Inquiry / A.P. • Inspection, • Discuss
obtained in any how the responsible
MMS. • Observation, Mngt/tcwg
previous party has compiled
Can do through: • Recompution (significant
Inquiries of mngt include: engagements; PFI
• Read judgmnt)
1) Any Subsequent event b) engagement • Whether RP has
Documentation • Compile the FI
2) RPT identification team’s extracted
• Read recent • Read the compile
3) Material commitment, experience Unadjusted FI
annual / prior FI
contractual obligation with the from appropriate
IFI • If aware :
4) Material Non- business and source
• Materiality as record/Doc is
monetary transaction the industry • obtain evidence
per FRF incomplete /
c) mgt’s about the

11.3 | P a g e Chp 11: SAE 3400, 3402, 3420

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5) Any fraud / non • Significant competence appropriateness of inaccurate →

comply L&R risk regarding the pro forma request mngt to
6) Analytical procedure • Corrected preparation of adjustments correct
7) Mngt assessment of MMS & PFI; • evaluate the • If unable to
G.C Uncorrected d) PFI is presentation of pro complete ,as
8) Event & condition of prior FS affected by forma financial mngt mngt fail
casting doubt on GC • Financial the mgt’s information to provide
9) How mngt make Accounting & judgment; • read the other record/doc →
significant a/cing reporting e) sources of information withdraw
estimate matters information included in the • If Aware:
10) Significant, unusual • Result of considered by Prospectus & ✓ FI not as per
complex transaction: Audit the mgt, their identify material FRF
• Significant change in procedure adequacy, inconsistencies ✓ FI MMS
Contract terms • Result of reliability of ✓ FI Mislead
• RPT relations internal audit the underlying → if mngt decline
• Changes in Business • Inquire mngt data, amendment →
• Significant J.entry (Reg. mngt f) likelihood of withdraw (with
• Significant trns near assessment of MM; reason)
yr end Fraud, change g) the stability of
• Status of uncorrected in Entity entity’s
misstatement during business, business;
previous engt change in I.C)

Inquiry Assist in:

• It assist in Mngt
Intent,
• Understand mngt past
history,
• Reason of choosing
particular action
• Mngt ability
(Professional Skeptisim)

Analytical Procedure
assist in

11.4 | P a g e Chp 11: SAE 3400, 3402, 3420

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• Obtain understanding
of entity
• Identify Inconsistency
(trend variance)
• Corroborate evidence
i.r.t other inquiry
• Serve as Additional
procedure when he
believe FS have MMS

Documentation:
to enable an experienced Document matters • Significant
practitioner, having no which are matter arising
previous connection, to important evidence during engt
understand: • Record of how FI
reconciles with
• NTE of procedure Underlying record
performed • Copy of final
version of
• Significant matters
compiled FI
arise & conclusion
reached (Entity T.B,
• Result obtained & Significant
conclusion reached accounting record
etc)
(Who & When performed
/reviewed)
Opinion
“nothing has come to our attention that anything has
causes us to believe that the FS do not give come to the
a true & fair view” auditor’s
attention, …….
believe that the
assumptions do
not provide a
reasonable basis
Any Other Important Topic:

11.5 | P a g e Chp 11: SAE 3400, 3402, 3420

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Going Concern Going Concern Can accountant In Report → a Pro forma Example of A/c Documentation
Procedure: Uncertainty: associate with statement that adjustments include: Payable AUP: File time Limit
• Inquire mngt about plan • If matter PFI? SO is responsible 1) Compare name & Timely Basis (Firm
for future action adequately • C-3,S-2 of CA for: • Adjustments to Amt O/s in T.B Policy) → Not
• Evaluate result of disclosed → Act • Preparing the unadjusted F.I that 2) Obtain supplier within 60 days
inquiries, whether mngt EOM • Clearly description of its illustrate the impact Confirmation
response provide • Not indicate: system as if transaction 3) Comparison
sufficient basis for: adequately ✓ Source of • Providing the occurred
✓ FS as G.C, or disclosed → Information services covered • Adjustments to Reporting Purpose of Engt:
✓ FS are MMS Qualified / ✓ Basis of by the SO’s unadjusted FI that Consideration: 1) Mandatory To
• Consider mngt response Adverse Forecast description are necessary for Below Statements comply L&R
• If Prior report ✓ Major • Stating the the pro forma FI to needs to be 2) Mngt/TCWG
Additional Procedure have EOM para assumption control be compiled on a attached in audit need for
when FS MAY be MMS: w.r.t material objectives basis consistent report: specific Purpose
(to conclude whether FS uncertainty → Auditor’s Duty? • Designing and with the applicable 1) Not an 3) For external
are MMS Or, not MMS) and it’s still implementing FRF Audit/Review parties under
exist & • PFI prepared controls to 2) Performed contract.
1) Add. Procedure will on basis of
Adequate achieve the additional 4) For
depend on Professional assumption.
Disclosure is control Form of Opinion? procedure Transactional
Judgement • Best estimate
made in objectives 3) Report is Purpose (M&A)
2) Additional Inquiry or assumption →
Current IFI → • Unmodified Opinion restricted
Analytical Procedure on Not
adding a ➔ PFI has been 4) Report related
affected item unreasonable
paragraph to compiled, in all only to
3) Other procedure • Hypothetical
highlight material respects element/Account
(TOD/subs) assumption →
continued M.U • Modified:
4) Subsequent event. consistent ✓ When L&R
Communication with purpose precludes
Additional Procedure of info
when Material publication of
when Debtor seems to • all material
Adjustment Modified Opinion
be uncollectable and he assumptions
require in IFI: Prospectus ➔
Inquires with Mngt: are adequately Withdraw or
Based on mngt response: disclosed
• Matter come seek Legal
• Debtor Not MMS (No • PFI is
to attention → advice
FAP require) prepared on a
which make ✓ When L&R Not
• FS is MMS (No FAP consistent
necessary to precludes
require) basis with
make material publication of
• Believe Debtor has historical FS
adjustment → Modified Opinion
MMS → not providing
11.6 | P a g e Chp 11: SAE 3400, 3402, 3420
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SAAE → so require communicate Prospectus ➔

additional procedure. ASAP to mngt. Assessing apply framework
[Continue to perform • Mngt not Presentation & requirement for
additional procedure, respond → Disclosure of opinion
until reaches (a) or (b)] Inform TCWG. PFI?
[if not able to conclude → • TCWG not Can use EOM
respond: • Informative & para also
then it’s scope limitation
✓ Modify, or Not misleading
→ can’t make unmodified
✓ Withdraw, or • accounting
opinion]
✓ Resign from policies
annual FS. • any change in
In report Description of the accounting
a review of financial • If any fraud / policy
statements and its L&R non comply • Assumptions
limitations, and the → Communicate are adequately
following statements: ASAP to mngt disclosed
(whether best
• It’s a Limited Document estimate or
assurance engmnt containing IFI: hypothetical)
• Making inquiries of • Where any doc • Date as of
mngt & Analytical containing IFI which PFI
Procedure indicates that prepared
• Procedure are less than IFI is Audited • Basis of
audit → review establishing
report shall Points in range
also be (not biased)
included
(otherwise
seek legal Reporting:
advise) • Presentation &
disclosure of
the PFI not
adequate →
Qualified or
adverse or
withdraw

11.7 | P a g e Chp 11: SAE 3400, 3402, 3420

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• Assumptions
do not provide
a reasonable
basis for the
PFI→ Adverse
opinion or
withdraw
• Scope
limitation→
Disclaim or
withdraw

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11.8 | P a g e Chp 11: SAE 3400, 3402, 3420

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