(a) Engagement and Quality control Standards: The following Standards
issued under authority of ICAI Council are collectively known as Engagement
Standards:
1.
Standards on Auditing (SAs) which apply in audit of historical financial
information.
2.
Standards on Review Engagements (SREs) which apply in review of
historical financial information.
3.
Standards on Assurance Engagements (SAEs) which apply in assurance
engagements other than audits and review of historical financial
information.
4.
Standards on Related Services (SRSs) which apply in agreed upon
procedures to information, compilation engagements and other
related service engagements.
AUDITING AND ETHICS
The purpose of issue of these standards is to establish high quality
standards and guidance in the areas of financial statement audits and in
other types of assurance services.
(b) As per SA 570, “Going Concern”, the following are examples of operating
events or conditions that, individually or collectively, may cast significant
doubt on the entity’s ability to continue as a going concern.
•
Management intentions to liquidate the entity or to cease operations.
•
Loss of key management without replacement.
•
Loss of a major market, key customer(s), franchise, license, or principal
supplier(s).
•
Labour difficulties.
•
Shortages of important supplies.
•
Emergence of a highly successful competitor.
(c) The auditor is required to report under Clause (x) of Paragraph 3 of
CARO 2020 that:
(a) whether moneys raised by way of initial public offer or further public
offer (including debt instruments) during the year were applied for the
purposes for which those are raised, if not, the details together with
delays or default and subsequent rectification, if any, as may be
applicable, be reported.
(b) whether the company has made any preferential allotment or private
placement of shares or convertible debentures (fully, partially or
optionally convertible) during the year and if so, whether the
requirements of section 42 and section 62 of the Companies Act, 2013
have been complied with and the funds raised have been used for the
purposes for which the funds were raised, if not, provide details in
respect of amount involved and nature of noncompliance.