4) Relevoot mation Poy considenoton . pronly odin . Spapetvel Faventng 2 PrPn7 ones Qwhine Ac Anvintory weoord, ot property adjusted Poors "IS 5 Auch ity ve ees, / @/ Sy @ Reasons “ouinon Aeros A ~ liobtll tas Qorpetve! Anerntey coves Reosen (or “ond © Retehlly FR ETANDARDS ON AUDITING an 2 Ss SA 501: Audit Evidence ~ Specific Consideration For Selected Items SS Selected Items r | > ee er) | a Inventory Litigation bf Claims Segment Information y a) ¢ + > Existence Condition Completeness Presentation & Disclosure as per FRF _ 1) Inventory: inventory — obtain S&A Aydit evidence for existence & condition Qn 9Mate (a) Attendance of physical counting jf practical a ON Tuafe mgt. insiniGtion” and procedure — for(fecording\& GontrollingSthe_results of physical Sankey countin © L Gy “BoseatloMof met counting procedure _ Godncop )) Inspect | Reng The aise ad This ees audivor in ascertain (existence of inventory) and/Tdentifying, ‘obsoleie. damaged, ageing inventories =r cordikon = ex) Couns with counteesesultsRoel Saventory accords te Artermine whether They (b) Perform audit procedure over entity ress tio EC atlas aur Jno physical inventory count” on later date (ie. other than date of FS) then perform audit ain audit evidence to check whether change in I inventory betieen Oundle ae t rocedure 10 date of FS perly recorded), —————~— = = —s CuaOates corcnsier tay fe aaa oe i auttor unable ation on count date fen cout on aerate date and eon Ui 2: ing teansactions) Myo . 5 Giscrepancies hoticed during physical count. t «Also ensure appropriate’cut off procedures followed by met. 2 Also get{WR on = Cem PrP ke] Paswrence eh Coval qricehees ‘Completeness of information provided “Assurance of piysical inventory count procedure’, threat to safety of auditor (General inconvenience riot sufficient), (hen periOR alternative audit procedure. Ifnot possible, modify reportas aresult of scope limitation, 25 p-w's 70S Example of alternative audit procedures Inspection of documentation of subsequent sale of speci inventory items) acquired 6b purchased (prior to physical inventory counting = ey ____—» 36 90 Geneal Givee: &s > Stock held with third party _,0> grr 385°" > (Confirmation from third party'as to the quantities & condition DReutty (Time | Cost 18 not “Perform Inspection, r lures, > ‘Perform Inspection or other audit procedures, stort valid bonis 40 omtt aud procedures Pox whi ch thers Chere Abert “1s a doubt aloout Tnkegrty AS no allernative Precederey Ato) gerhy, aubiter roy prafem other o ab Alem >. makriel Ahem Ihe has ocedurt , Eyomples or: Ao Reker Ahe grocers, BY CA ATUL AGARWAL AIR 1 CA FINAL CYS Seopecting dowmentelion ryprting ‘owvertony bell ly third Qevty Page 25, fo) Request catKamolion Rom Other Gelles when inventory ts pledge? @ Obtaviny doeltr audhtr Depart, seme ousibe Mept on adeprony of dhs) gehts conhel G) Pieod wv omongye onether auditor te aftnd Rhysitel faventoy covat. Ober Put Quark f EEE EEL LOSS D A Sf df ofSTANDARDS ON AUDITING 2) Litigation & Glaims: a. Auditor aes & perform audit procedure}to identify) litigations & claims which give rise toftisk of MM. = “Scnguiry from Mgt. including in house legal counsel Tey Bere mame: > Review ‘books of those charged with governance \ Pewew eve eat Sy Mage expense ‘+ Ifauditor assess risk of material misstatement regarding litigation & Claims Seek direct communication with entity's external legal counsel > If management refuse to give permission to communicate or legal By letter of inguires prepaid by mgt. and Counsel refuses to respond: sent By auditor. ‘© Peeform Alterna Requesting legal counsel to communicate procedures directly with auditor If law/regulation prohibits legal couse to communicate directly with auditor, then perform Alternative audit p + Modify Report 3). Segment Information: Auditor shall obisin S&A Audit Evidence for presentation & disclosure as per FRF by: ad Crm AE (@) Obiainundeistandibg atthe by mat in determining segment information Updereney Soe (i) Evaluate whether suet Tethod provide diclostie as per FRF te Gi \TeRiag application cTscimetiod \ pe () Perform anialjicallor other auit procedures Galen atsdeee b 38 sag e Je Ayn: Ercamsles of Matters relevent Qo Sdlotatng, undewtending a) Ave weds "in Sacra sage! Andamolien : Qa Solel Tronsy [Chorges \behwern Segments, & elt eninelion op Anter- segment Grooved ® Arocoton Q owes & cost omong Segment ® Corsislency with gov etods ond disclosure ® ony “nconsttlenc G Comportson oe alg’ with olen expected esults Ceqroperehiog on 08 genelage of Sols) L sates | oxic /prr period hod geo BY CA ATUL AGARWAL AIR 1CA FINAL Page 26