- Involvement of engagement partner and key members of the excecutive team in planning
- Establishement of audit strategy
- Development of plan
- Assessment of risk of material misstatement
- Audit procedures
- Engagement letter and manangement representation letter
- Documentation of work allotted
(i) Involvement of engagement partner and key members of the excecutive team in planning â€“
(ii)Establishement of audit strategy â€“Â Â Â
(iii)Development of planÂ
(iv)Assessment of risk of material misstatement â€“Â
(vi)Engagement letter and manangement representation letter
Â (vii)Documentation of work allottedÂ
SA 299 JOINT AUDIT OF FINANCIAL STATEMENTS .
The Institute of Chartered Accountants of India has issued Standard on Auditing (SA) 299 (Revised), â€śJoint Audit of Financial Statementsâ€ť which lays down the principles for effective conduct of joint audit to achieve the overall objectives of the auditor as laid down in SA 200 â€śOverall Objectives of the Independent Auditor and the conduct of an audit in accordance with Standards on Auditingâ€ť.
the engagement partner and other key members of the engagement team from each of the joint auditors should be involved in planning the audit.
- the joint auditors should jointly establish an overall audit strategy which sets the scope, timing and direction of the audit, and also guides the development of the audit plan.
- before the commencement of the audit, the joint auditors should discuss and develop a joint audit plan. In developing the joint audit plan, the joint auditors should:
- identify division of audit areas and common audit areas;
- ascertain the reporting objectives of the engagement;
- consider and communicate among all joint auditors the factors that are significant
- in directing the engagement teamâ€™s efforts;
- consider the results of preliminary engagement activities, or similar engagements performed earlier.
- ascertain the nature, timing and extent of resources necessary to accomplish the engagement.
- each of the joint auditors should consider and assess the risks of material misstatement and communicate to other joint auditors.
- the joint auditors should discuss and document the nature, timing, and the extent of the audit procedures for (I) common and (II) specific allotted areas of audit to be performed.
- the joint auditors should obtain common engagement letter and common management representation letter.
- the work allocation document should be signed by all the joint auditors and communicated to those charged with governance.
It further states that, in respect of audit work divided among the joint auditors, each joint auditor shall be responsible only for the work allocated to such joint auditor including proper execution of the audit procedures. On the other hand, all the joint auditors shall be jointly and severally responsible for:
- the audit work which is not divided among the joint auditors and is carried out by all joint auditors;
- decisions taken by all the joint auditors under audit planning in respect of common audit areas;
- matters which are brought to the notice of the joint auditors by any one of them and there is an agreement among the joint auditors on such matters;
- examining that the financial statements of the entity comply with the requirements of therelevant statutes;
- presentation and disclosure of the financial statements as required by the applicable financial reporting frame work;
- ensuring that the audit report complies with the requirements of the relevant statutes, applicable Standards on Auditing and other relevant pronouncements issued by ICAI.
In case a joint auditor comes across matters which are relevant to the areas of responsibility of other joint auditors and which deserve their attention, or which require disclosure or require discussion with, or application of judgment by other joint auditors, the said joint auditor shall communicate the same to all the other joint auditors in writing prior to the completion of the audit.
It may be noted that the joint auditors are required to issue common audit report. However, where the joint auditors are in disagreement with regard to the opinion or any matters to be covered by the audit report, they shall express their opinion in a separate audit report. In such circumstances, the audit report(s) issued by the joint auditor(s) shall make a reference to each otherâ€™s audit report(s).