Presented by:
CA Uday Sathaye
Gokhale & Sathe
Chartered Accountants
EFFECTIVE CONCURRENT AUDIT REPORTING
Certificate course on Concurrent Audit of Banks
Audit Objectives:
As per SA 700 issued by ICAI:
Audit Objectives are :
a) To form an opinion on the Financial Statements
b) To draw conclusions based on Audit Evidence obtained
c) To clearly express the opinion through a Written Report
CA Uday Sathaye Gokhale & SatheChartered Accountants
Audit Report Stages
• Planning Stage
• Draft Report preparation Collection of data Discussion Final draft
• Revising the Draft Report
CA Uday Sathaye Gokhale & SatheChartered Accountants
Who are the readers ?
1. Branch2. Compliance Department3. Controlling Office4. RBI5. Other Govt Agencies, etc.
An effective Audit Report should focus on its readers and should contain necessary details of Discrepancies Regulatory / Internal guidelines Risk associated, etc
CA Uday Sathaye Gokhale & SatheChartered Accountants
Consideration of SIA 4 in Reporting
Title
• Appropriate
• Expressing nature of the Report
Addressee
Appropriately addressed
Report Distribution List
Mention of the recipients of the report
CA Uday Sathaye Gokhale & SatheChartered Accountants
Coverage
Identify the systems, processes, functional lines or other items of the entity
Opening or introductory paragraph
• The operation of systems, procedures and controls are the responsibility of the entity’s management
• The responsibility of the internal auditor is to express an opinion
Scope paragraph
• Describe the scope of the internal audit
• Describe that the internal audit was conducted in accordance with generally accepted audit procedures as applicable.
Executive Summary paragraph
Indicate the highlights of the internal audit findings, key issues and observations of concern, significant controls lapses, failures or weaknesses in the systems or processes.
CA Uday Sathaye Gokhale & SatheChartered Accountants
Observations paragraph
Mention the process name, significant observations, findings, analysis and comments of the internal auditor.
Comments from local management
• The observations and comments from the local management of the entity provided after giving due cognizance to the internal auditor’s comments
• Local management’s action plan or resolution of the issues and compliance to the internal auditor’s recommendations and suggestions
Action taken report
• Appended after the observations and findings
• It should include status of compliance / non-compliance w.r.t to previous internal audit observations and reasons for non-compliance thereof
CA Uday Sathaye Gokhale & SatheChartered Accountants
Date, place & signature of the internal auditor• Signed by the internal auditor in his personal name• Membership No.
Communication to the Management• Discussion Draft
• Exit Meeting
• Formal Draft
• Final Report
Limitation on scope
• Describe the limitation
CA Uday Sathaye Gokhale & SatheChartered Accountants
Report Writing
Use of Language in Reporting: Sentence Formation
Grammatical accuracy
Avoid use of biased language
Avoid use of Ambiguous Pronoun Reference
Avoid use of words like Generally, Mostly etc.
Use of too much technical words to be avoided
Use of Bullets
Answer each question and do not put symbols like -
Audit observations should be concise yet clear
CA Uday Sathaye Gokhale & SatheChartered Accountants
Difference of opinion or understanding with Auditee should be
spelled out clearly
Clarity about views to be presented in Report
Emphasis should be at proper places only
CA Uday Sathaye Gokhale & SatheChartered Accountants
Report Writing (Contd…)
General Guidelines for Report Format Selection of Font and consistency throughout the Report
(Including Annexures)
Margins
Spacing
Tabs
Page size
Header and footer
Date and Time Formats
CA Uday Sathaye Gokhale & SatheChartered Accountants
Value Addition to Audit Report
Attachments / Annexures / Appendices
Executive Summary/Flash Report
Key Audit Findings
Sample Details
Revenue Leakage Statements
CA Uday Sathaye Gokhale & SatheChartered Accountants
Conclusion of Audit Report
Review internally before submission of Final Report :
Discussion with Auditee and necessary correction thereafter
Stamping/Initials/Timing
Keep proper Attendance Record
Cover everything and issue Certificates appropriately Disclaimer should be properly given
Acknowledgment
CA Uday Sathaye Gokhale & SatheChartered Accountants
CA Uday SathayeGokhale & Sathe
Chartered AccountantsEmail: [email protected]