SA 315

Yes it can be taken because there is high possibility for management override of controls due to complexity of related party transactions

Suresh Avinash

CA Final

★ 3K+

08-Nov-21 15:50

First point tells about the auditors expectation of efficiency of management in proper execution of internal controls. This means that if auditor believes that the management is properly doing the job of internal control then there is greater reliability on audit evidence that is generated. Anyhow for some significant classes of transactions we need to test the internal controls. Second point talks about IT dependent controls and whether they are properly implemented Third point talks about our approach whether we need to test the controls or go with only substantive testing Fourth point tells what the auditor thinks of the operating effectives of IC based on his understanding of entity Hope this helps.

Suresh Avinash

CA Final

★ 3K+

08-Nov-21 15:46

Is related party transactions is an good example for significant class of transactions that must be checked thoroughly??

Thread Starter

Harsha vardhan S

CA Final

★ 470

08-Nov-21 15:49

Thank you so much for clearing the doubt

Thread Starter

Harsha vardhan S

CA Final

★ 470

08-Nov-21 15:50