CA Inter | SA 299: Joint Audit of Financial Statements | CAP CLASSES

 SA 299: Joint Audit of Financial Statements

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Scope:

• Deals with responsibilities of joint auditors appointed to conduct audit of financial statements of an entity.
• Applicable when two or more auditors are appointed as joint auditors.

Objectives:

• Effective division of work among joint auditors.
• Ensure coordination and cooperation among joint auditors.
• Define individual and joint responsibility of the auditors.

Key Points:

1. Division of Work:
• Joint auditors should divide the audit areas among themselves based on mutual agreement.
• Each auditor should take responsibility for the work allocated to them.
2. Coordination:
• Joint auditors should coordinate their work to ensure consistency in audit procedures.
• Regular communication and meetings should be held to discuss audit progress and findings.
3. Individual Responsibility:
• Each joint auditor is responsible for the work assigned to them.
• They should collect sufficient appropriate audit evidence and perform audit procedures as per auditing standards.
4. Reporting:
• Joint auditors should prepare a joint audit report.
• If there is a disagreement, each auditor may issue a separate report explaining their perspective.
5. Documentation:
• Proper documentation should be maintained for work allocated, procedures performed, evidence obtained, and conclusions reached.
6. Other Auditors’ Work:
• One joint auditor is not required to review the work performed by the other joint auditors.
• Each auditor should rely on the other auditors' work unless they have reason to believe it is unreliable.
7. Important Considerations:

·       Joint auditors should have a clear understanding of their respective areas of work.

·       Regular sharing of information and significant audit findings is crucial.

·       They should be aware of each other’s responsibilities to avoid duplication and ensure comprehensive coverage of all audit areas.

Solved Previous Year Exam Questions

Question 1:

Explain the concept of division of work among joint auditors as per SA 299. Answer: The division of work among joint auditors is done by mutual agreement, where specific audit areas are allocated to each auditor. Each auditor is responsible for their assigned areas and must perform audit procedures and gather sufficient audit evidence. They need to coordinate to ensure consistency in audit approaches.

Question 2:

How should joint auditors deal with disagreements in their audit findings? Answer: In case of disagreements, joint auditors should try to resolve them through discussion. If they are unable to agree, each auditor can issue a separate audit report detailing their own conclusions and the reasons for their disagreement.

Question 3:

Discuss the documentation requirements for joint auditors as per SA 299. Answer: Joint auditors must maintain proper documentation of the work allocated, audit procedures performed, evidence obtained, and conclusions reached. This documentation should reflect the coordination among auditors and any significant findings or decisions made during the audit.

Question 4:

What is the importance of coordination among joint auditors? Answer: Coordination ensures that the audit is comprehensive and consistent. It helps in avoiding duplication of work and ensures that all significant areas are covered. Regular communication among joint auditors is essential for sharing audit progress and significant findings.

Question 5:

Can a joint auditor rely on the work of another joint auditor? Explain. Answer: Yes, a joint auditor can rely on the work of another joint auditor unless they have reason to believe that the other auditor's work is unreliable. There is no requirement for one joint auditor to review the work performed by another, as each is responsible for their assigned areas.