Audit & Assurance — ICAB CA Professional Level

01

Foundation

Reintroduction to Audit & Assurance

ISA 200 · IFAC Framework

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Official Definition — Assurance Engagement

"An engagement in which a practitioner expresses a conclusion designed to enhance the degree of confidence of the intended users, other than the responsible party, about the outcome of the evaluation or measurement of a subject matter against criteria."

৭টা Key Elements (মুখস্থ করো)

Responsible Party — যে party দায়িত্বে আছে (management)
Practitioner — যিনি কাজ করবেন (auditor)
User — যাদের জন্য opinion (shareholders)
Subject Matter — কী examine হচ্ছে (financial statements)
Criteria — কীসের বিপরীতে (IFRS, ISAs)
Sufficient Appropriate Evidence
Written Report with Conclusion

Audit-এর Benefits

Financial statements-এর credibility বাড়ায়
Bank loan / finance পাওয়া সহজ হয়
Fraud deterrent হিসেবে কাজ করে
NBR (Tax Authority)-এর কাছে গ্রহণযোগ্য
Business valuation-এ সাহায্য করে
Management-এর জন্য internal assurance

বিষয়	Reasonable Assurance	Limited Assurance
Level	High	Moderate
Conclusion type	Positive opinion	Negative opinion
Wording	"gives a true and fair view"	"nothing has come to our attention…"
Work done	Extensive testing	Mainly inquiry & analytical
Example	Statutory audit (ISAs)	Review engagement (ISRE 2400)

🇧🇩 সহজ কথায়

Assurance মানে একজন independent professional examine করে confidence বাড়ান। Reasonable = doctor full checkup করে "সুস্থ" বললেন। Limited = শুধু দেখে "কিছু চোখে পড়েনি" বললেন। Negative opinion মানে খারাপ opinion না — এটা statement-এর grammatical form।

🎯

Exam Tip

"Elements of assurance engagement" — ৭টা point লিখলে full marks। "Compare reasonable and limited" — table format-এ লিখলে সবচেয়ে ভালো।

Chapter 1 Key Takeaways

7 elements of assurance Reasonable = High = Positive Limited = Moderate = Negative ISA 200 Benefits of audit

📌 Key Topics

Assurance definition7 ElementsReasonable vs LimitedPositive vs Negative opinionBenefits of auditISA 200

💡 Examples & Analogies

🩺 Doctor Analogy

Reasonable assurance = doctor full body checkup করে বললেন "আপনি সুস্থ।" Limited assurance = শুধু দেখে বললেন "কিছু চোখে পড়েনি।" দুটোই assurance — কিন্তু level আলাদা।

💼 Investment Example

তুমি একটা company-তে invest করতে চাও। Financial statements দেখলে — কিন্তু কীভাবে বিশ্বাস করবে? Auditor-এর opinion সেই বিশ্বাসটা দেয়।

❌ Common Mistake

"Negative opinion" মানে খারাপ opinion না! এটা statement-এর grammatical form। "Nothing has come to our attention..." — এটাই negative form।

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1.1 Assurance — Full Definition

An assurance engagement is one in which a practitioner expresses a conclusion designed to enhance the degree of confidence of the intended users, other than the responsible party, about the outcome of the evaluation or measurement of a subject matter against criteria. Assurance engagements include audits, reports on internal control and review of business plans.

1.2 The 7 Elements — বিস্তারিত

Element	মানে কী?	Example
Responsible Party	Subject matter-এর জন্য দায়ী যে party	Company management
Practitioner	Assurance কাজ করেন যিনি	External auditor, ICAB member
User	Report ব্যবহার করবেন যারা	Shareholders, banks, investors
Subject Matter	কী examine হচ্ছে	Financial statements, internal controls
Criteria	কীসের বিপরীতে মাপা হচ্ছে	IFRS, ISAs, company policies
Evidence	Sufficient এবং appropriate হতে হবে	Invoices, bank statements, confirmations
Written Report	Conclusion লিখিতভাবে দিতে হবে	Auditor's report, review report

1.3 Levels of Assurance — বিস্তারিত উদাহরণ

IFAC দুটো ধরনের assurance engagement recognise করে। কোনো assurance engagement-ই absolute assurance দিতে পারে না — কারণ evidence-এর inherent limitations থাকে।

Reasonable Assurance — উদাহরণ

"In our opinion, the financial statements give a true and fair view of the state of affairs of the company as at 31 December 20X5..."
→ High level, positive form, extensive work done

Limited Assurance — উদাহরণ

"Nothing has come to our attention that indicates material internal control weakness."
→ Moderate level, negative form, mainly inquiry & analytical procedures

1.4 Audit-এর সুবিধা — বিস্তারিত

Benefit	কীভাবে?
Credibility বাড়ায়	Independent auditor-এর opinion থাকলে financial statements বেশি বিশ্বাসযোগ্য হয়
Finance পাওয়া সহজ	Banks এবং investors audited accounts দেখতে চায় — loan approval সহজ হয়
Fraud deterrent	Audit হবে জানলে staff সাবধানে থাকে — fraud-এর সুযোগ কমে
NBR-এর আস্থা	Tax authority (NBR) audited accounts বেশি trust করে
Business valuation	Company কিনতে/বেচতে গেলে audited accounts দরকার
Management benefit	Auditor-এর management letter-এ weaknesses জানা যায়, improvement হয়
Going concern signal	Company-র financial health নিয়ে assurance পাওয়া যায়

1.5 ISA 200 — Overall Objectives

ISA 200 অনুযায়ী auditor-এর দুটো overall objectives:

Reasonable assurance obtain করা যে financial statements as a whole-এ material misstatement নেই — whether due to fraud or error
Findings-এর উপর ভিত্তি করে auditor's report issue করা

📎 Resources

02

🔥 High Priority

Responsibilities

ISA 240 · ISA 250 · Companies Act 1994

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Management-এর ৬টা Responsibilities

Business manage করা এবং objectives achieve করা
Business risks assess করা
Company assets safeguard করা
Proper accounting records রাখা
Financial statements prepare এবং RJSC-তে file করা
সব applicable laws মেনে চলা

Auditor করেন / করেন না

✅ Financial statements audit করেন
✅ Material misstatements identify করার চেষ্টা করেন
✅ Audit opinion দেন
❌ Financial statements prepare করেন না
❌ Fraud prevent করার দায়িত্ব নেই
❌ সব fraud ধরার guarantee নেই

বিষয়	Error	Fraud
Intent	Unintentional	Intentional
Example	Calculation mistake	Revenue inflation
Types	—	Fraudulent reporting / Misappropriation
ISA	—	ISA 240

ISA 240 — Key Principle

"Auditors are NOT responsible for preventing fraud, but must plan and perform their audit to obtain reasonable assurance that material misstatements, whether due to fraud or error, are detected."

ISA 250 — Laws & Regulations

Direct effect: সরাসরি FS affect করে — auditor সরাসরি verify করেন (Companies Act, Tax laws)
Indirect effect: Operations affect করতে পারে — auditor শুধু aware থাকেন (Labor law, Environmental law)
Bangladesh relevant: Companies Act 1994, SEC Regulations, Income Tax Ordinance, VAT Act, Labor Act

Money Laundering — ৩ Stages

Placement: Illegal cash financial system-এ ঢোকানো
Layering: Multiple transactions দিয়ে source লুকানো
Integration: Clean money হিসেবে ফেরত আনা
⚠️ Tipping off = ILLEGAL — client-কে বলা যাবে না!
MLRO-কে report করতে হবে

🇧🇩 Expectations Gap সহজ ভাষায়

Public মনে করে auditor সব fraud ধরবে, company দেউলিয়া হবে না guarantee দেবে — কিন্তু এটা সত্যি না। Auditor শুধু reasonable assurance দেন। এই দুটোর মধ্যে পার্থক্যই হলো expectations gap।

Chapter 2 Key Takeaways

Management: 6 responsibilities Error = unintentional Fraud = intentional (ISA 240) ISA 250: direct vs indirect laws Money laundering: 3 stages Tipping off = ILLEGAL Expectations gap

📌 Key Topics

Management 6 responsibilitiesAuditor vs ManagementError vs FraudISA 240ISA 250 Direct/Indirect lawsMoney laundering 3 stagesTipping offExpectations gap

💡 Examples & Analogies

🚨 Common Misconception

অনেকে মনে করে auditor-এর কাজ হলো fraud ধরা। এটা সম্পূর্ণ ভুল। Auditor fraud prevent করার দায়িত্ব নেন না — তবে material misstatement due to fraud খোঁজার চেষ্টা করেন।

💰 Fraud Example

Purchase ledger clerk Tk 10,000 নিজের account-এ transfer করেছে = Misappropriation of assets। Revenue inflate করে দেখানো = Fraudulent financial reporting।

⚠️ Tipping Off Warning

Money laundering suspect করলে MLRO-কে জানাও। Client-কে কখনো বলবে না — এটা "tipping off" যা legally prohibited। Client evidence নষ্ট করতে পারে।

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2.1 Directors' Responsibilities under Companies Act 1994

Companies Act 1994-এ directors-দের statutory duties clearly defined। এগুলো ঠিকমতো না করলে criminal consequences হতে পারে।

Managing the company: Business এমনভাবে manage করা যাতে objectives achieve হয় এবং shareholders-দের সুবিধা হয়
Safeguarding assets: Company-র assets রক্ষার জন্য reasonable steps নেওয়া — fraud prevention systems implement করা
Books and records: Cash payments/receipts, assets, liabilities সব properly record করা
Financial statements preparation: True and fair view দেখানো FS prepare করে RJSC-তে submit করা
Accounting policies: Suitable policies select করে consistently apply করা, prudent estimates করা
Going concern basis: FS going concern basis-এ prepare করা যদি না inappropriate হয়

2.2 Auditor vs Management — Key Distinction Table

বিষয়	Management-এর কাজ	Auditor-এর কাজ
Financial Statements	Prepare করা	Audit করা, opinion দেওয়া
Internal Controls	Design এবং implement করা	Understand এবং test করা
Fraud	Prevent এবং detect করার responsibility	Material misstatement due to fraud খোঁজার চেষ্টা
Laws	Comply করার responsibility	Awareness রাখা, significant non-compliance report করা
Business operations	Run করা	Understand করা, risk assess করা

2.3 ISA 240 — Fraud বিস্তারিত

Fraudulent Financial Reporting — উদাহরণ

Revenue inflate করে দেখানো, expenses understated করা, liabilities conceeal করা। Example: Enron scandal — off-balance-sheet liabilities hide করা হয়েছিল।

Misappropriation of Assets — উদাহরণ

Cash চুরি, inventory আত্মসাৎ, fictitious suppliers-এ payment। Example: Purchase ledger clerk Tk 10,000 নিজের account-এ transfer করেছে।

ISA 240 বলে auditor-কে professional scepticism maintain করতে হবে — মানে সবকিছু একটু সন্দেহের চোখে দেখা, management-এর explanations blindly accept না করা।

2.4 ISA 250 — Laws & Regulations Details

Type	Definition	Auditor-এর Role	Bangladesh Examples
Direct Effect	সরাসরি FS figures affect করে	Specifically verify করেন	Companies Act 1994, Income Tax Ordinance, VAT Act
Indirect Effect	Operations affect করতে পারে → FS-কে indirectly affect	Awareness রাখেন, specific compliance verify করেন না	Labor Act, Environmental laws, Health & Safety

2.5 Money Laundering — বিস্তারিত Stages

Stage	কী হয়?	Example
Placement	Illegal cash কোনো financial system-এ ঢোকানো	Bank-এ cash deposit করা, real estate কেনা
Layering	Multiple transactions দিয়ে illegal source লুকানো	বিভিন্ন দেশে wire transfers, shell companies ব্যবহার
Integration	Clean money হিসেবে economy-তে ফেরত আনা	Business-এ investment, luxury goods কেনা

⚠️ Tipping Off: Client-কে money laundering investigation সম্পর্কে জানালে তারা evidence নষ্ট করতে পারে। তাই tipping off করা legally prohibited। MLRO (Money Laundering Reporting Officer)-এ report করতে হবে।

2.6 Sustainability — Management-এর নতুন দায়িত্ব

আজকের companies-দের ESG (Environmental, Social, Governance) issues-ও consider করতে হচ্ছে। UN Sustainable Development Goals (2016), TCFD (Task Force on Climate-related Financial Disclosures), এবং ISSB Standards management-দের এই বিষয়গুলো report করতে encourage করছে।

📎 Resources

03

Medium

Professional Standards

IAASB · IFAC · ICAB · ISQMs

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Standards Hierarchy

IFAC — Global body (130+ countries)
IAASB — IFAC-এর subsidiary, ISAs তৈরি করে
ICAB — Bangladesh-এর local regulator
ICAB ISAs adopt করে Bangladesh-এ apply করে
FRC (UK) — ISAs (UK) এবং Ethical Standard issue করে

Standards-এর Types

ISA — Audits of historical financial information
ISRE — Review engagements
ISRS — Related services (AUP, Compilation)
ISAE — Other assurance engagements
ISQM 1 & 2 — Quality management

COSO Framework — Internal Control 5 Components

Control Environment — "Tone at the top" — management-এর attitude এবং values
Risk Assessment — Risks identify এবং assess করা
Control Activities — Actual controls: authorization, segregation of duties, reconciliation
Information & Communication — সঠিক তথ্য সঠিক সময়ে পৌঁছানো
Monitoring — Controls কাজ করছে কিনা দেখা

Chapter 3 Key Takeaways

IAASB → IFAC subsidiary ICAB = Bangladesh regulator 5 standard types: ISA, ISRE, ISRS, ISAE, ISQM COSO 5 components

📌 Key Topics

Why standards neededIAASB = IFAC subsidiaryISA ISRE ISRS ISAE ISQMFRC UKICAB Bangladesh regulatorCOSO 5 components

💡 Examples & Analogies

📊 Standards Analogy

ধরো দুটো company-র audit দুটো আলাদা firm করলো — কিন্তু সম্পূর্ণ আলাদা পদ্ধতিতে। তাহলে কি দুটো FS compare করা যাবে? না! Standards-ই comparability নিশ্চিত করে।

🏛️ Bangladesh Context

ICAB = IFAC-এর member → IAASB-র ISAs follow করতে হয়। সব statutory audit Bangladesh-এ ISAs অনুযায়ী হতে হবে।

🧩 COSO Remember

Control Environment (tone at top) → Risk Assessment → Control Activities (authorisation, segregation) → Information & Communication → Monitoring। Top to bottom — C-R-A-I-M।

3.1 Standards Hierarchy

Body	Role	Bangladesh Link
IFAC	Global accounting body (130+ countries)	ICAB is a member
IAASB	IFAC subsidiary — creates ISAs	ISAs adopted via ICAB
IESBA	IFAC subsidiary — creates ethics code	ICAB Code of Ethics based on this
ICAB	Bangladesh local regulator	Adapts and enforces standards locally
FRC (UK)	Issues ISAs (UK) & Ethical Standard	Referenced for guidance

3.2 Standards Types

Standard	Full Name	কী বিষয়ে?
ISA	International Standards on Auditing	Historical financial info-র audit
ISRE	International Standards on Review Engagements	Review engagements
ISRS	International Standards on Related Services	AUP, Compilation
ISAE	International Standards on Assurance Engagements	Non-historical assurance
ISQM 1&2	International Standards on Quality Management	Firm & engagement quality

3.3 COSO Framework — 5 Components

Component	কী করে?	Example
Control Environment	"Tone at the top" — management-এর ethics, values, attitude	Ethics policy, integrity of directors
Risk Assessment	Business risks identify এবং assess করা	Annual risk register, fraud risk assessment
Control Activities	Actual controls implement করা	Authorization, segregation of duties, reconciliation
Information & Communication	সঠিক তথ্য সঠিক সময়ে সঠিক জায়গায়	Management reporting, ERP systems
Monitoring	Controls কাজ করছে কিনা দেখা	Internal audit, management review

📎 Resources

04

🔥 High Priority

Professional Ethics

IESBA Code · ICAB Code of Ethics

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Mnemonic — 5 Fundamental Principles

I O P C C

IIntegrity — সৎ ও সরল থাকা, false statements দেওয়া যাবে না

OObjectivity — Bias, conflict of interest থেকে মুক্ত থাকা

PProfessional Competence & Due Care — Knowledge maintain করা, diligently কাজ করা

CConfidentiality — Client info third party-কে না জানানো (exceptions আছে)

CProfessional Behaviour — Profession-এর reputation নষ্ট না করা

Mnemonic — 6 Threats to Independence

S S A M F I

SSelf-Interest — নিজের financial interest judgment affect করছে (e.g. client-এর shares hold করা)

SSelf-Review — নিজের কাজ নিজে review করা (e.g. accounts prepare করে audit করা)

AAdvocacy — Client-এর পক্ষে এতটাই advocate করা যে objectivity হারানো

MManagement — Auditor management-এর কাজ করছেন

FFamiliarity — Client-এর সাথে অতিরিক্ত ঘনিষ্ঠতা (e.g. ১০ বছরের same client)

IIntimidation — Client হুমকি দিচ্ছে বা চাপ দিচ্ছে

Independence — 2 Types (দুটোই দরকার)

Independence of Mind (Real): Auditor নিজে বিশ্বাস করেন তিনি independent
Independence in Appearance (Perceived): Outside world-ও মনে করে auditor independent
Fee dependency: >15% (non-listed) বা >10% (listed) = threat

Confidentiality — Exceptions

Legal duty: Court order, money laundering reporting
Public interest: Major fraud যা দেশের ক্ষতিকর
Client permission: Client নিজেই জানাতে বলেছে
এই তিনটার বাইরে confidentiality ভাঙা যাবে না

🎯

Ethics Scenario Questions — 3-Step Approach

Step 1: Threat টা identify করো (SSAMFI-এর কোনটা?) → Step 2: কোন principle at risk সেটা বলো (IOPCC) → Step 3: Safeguard কী হবে সেটা বলো। সবশেষে conclusion দাও।

🇧🇩 Greenwashing

Company ESG report-এ নিজেদের "সবুজ" দেখালেও আসলে না হলে সেটা unethical। ISSB Standards এবং TCFD এই area regulate করছে। Auditors-দের এখানেও integrity maintain করতে হবে।

Chapter 4 Key Takeaways

IOPCC — 5 principles SSAMFI — 6 threats Independence: mind + appearance Fee: 15% / 10% threshold Confidentiality: 3 exceptions

📌 Key Topics

IOPCC 5 principlesSSAMFI 6 threatsSafeguards 3 levelsIndependence of mind + appearanceFee 15%/10% thresholdConfidentiality 3 exceptionsGreenwashing

💡 Examples & Analogies

🔑 IOPCC Memory Trick

Integrity, Objectivity, Professional Competence, Confidentiality, Professional Behaviour — মনে রাখো: "I Often Put Careful Consideration"

⚡ SSAMFI Threats

Self-interest: client-এর shares hold করা। Self-review: নিজের কাজ নিজে audit। Advocacy: court case লড়া। Management: MD-র কাজ করা। Familiarity: ১০ বছরের same client। Intimidation: "clean opinion না দিলে change করব।"

💰 Fee Dependency Example

Firm-এর total annual fee = Tk 1 crore। ABC Ltd থেকে fee = Tk 20 lakh (20%) → Listed company হলে threshold exceed (>10%) → Threat! Safeguard দরকার।

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4.1 কেন Professional Ethics দরকার?

Accounting profession-এর income-এর বড় অংশ আসে audit এবং assurance services থেকে। Users এই services-এ তখনই আস্থা রাখেন যখন তারা জানেন accountants ethical। তাই profession-এর survival নিজেই ethical behaviour-এর উপর নির্ভরশীল।

4.2 IESBA Code — 5 Principles বিস্তারিত

Principle	মানে	Violation Example	Exam Context
Integrity	Straightforward এবং honest — কোনো false/misleading statement না	Client-এর চাপে ভুল figures accept করা	সবচেয়ে basic — সব situation-এ apply
Objectivity	Bias, conflict of interest বা undue influence থেকে মুক্ত	Client-এর shares hold করে audit করা	Independence-এর core
Professional Competence	Current knowledge maintain করা, diligently কাজ করা	নতুন IFRS না জেনেই opinion দেওয়া	CPD requirement-এর basis
Confidentiality	Client info third party-কে unauthorised disclosure না করা	Party-তে client-এর financial difficulties নিয়ে কথা বলা	3 exceptions মনে রাখতে হবে
Professional Behaviour	Laws মানা, profession-এর reputation নষ্ট না করা	Social media-তে client নিয়ে বাজে comment	Broad principle — catch-all

4.3 SSAMFI — 6 Threats বিস্তারিত উদাহরণ

Threat	কখন হয়?	Bangladesh Example	Safeguard
Self-Interest	Auditor-এর financial interest client-এর সাথে connected	Client-এর Grameen Bank shares hold করছেন	Shares dispose করুন বা engagement ছেড়ে দিন
Self-Review	নিজের কাজ নিজে review করা হচ্ছে	Firm client-এর accounts prepare করেছে, এখন audit করছে	Different team বা different firm
Advocacy	Client-এর পক্ষে অতিরিক্ত advocate করা	Client-এর tax case court-এ লড়া	Engagement থেকে বের হওয়া
Management	Auditor management role নিয়েছেন	Client-এর MD absent — auditor business decisions নিচ্ছেন	Management role নেওয়া বন্ধ করুন
Familiarity	Client-এর সাথে অতিরিক্ত ঘনিষ্ঠতা	১৫ বছর ধরে same partner same client audit করছেন	Partner rotation (7 years for listed)
Intimidation	Client হুমকি বা চাপ দিচ্ছে	"Clean opinion না দিলে আমরা firm change করব"	Report করুন, যদি দরকার হয় resign করুন

4.4 Independence — Details

Fee Dependency Rules

Non-listed client: একটা client থেকে firm-এর total fees-এর >15% হলে threat।
Listed client: >10% হলে threat।
Solution: Client-কে জানাতে হবে, independent review করতে হবে।

Gifts & Hospitality

কোনো gifts বা hospitality accept করা যাবে যদি এটা trivial and inconsequential হয়। বড় gifts self-interest threat তৈরি করে। কোনো reasonable person যদি এটা inappropriate মনে করেন, নেওয়া যাবে না।

4.5 Confidentiality Exceptions — বিস্তারিত

Exception	কখন?	Example
Legal duty	Court order, money laundering report করতে বাধ্য	MLRO-তে suspicious transaction report
Public interest	Major fraud যা দেশের/জনগণের ক্ষতি করছে	Massive Ponzi scheme discover হলে
Client permission	Client নিজেই জানাতে বলেছে	Bank-এর জন্য reference letter দেওয়া

4.6 Greenwashing — নতুন Ethical Challenge

Companies ESG reports-এ নিজেদের "সবুজ" বা "sustainable" দেখালেও আসলে সেটা না হলে এটা integrity এবং objectivity-র violation। TCFD framework এখন এই reporting-কে structure দিচ্ছে, কিন্তু assurance mandatory না। তবে professional ethics সবসময়ই apply হয়।

📎 Resources

05

Medium

Quality Management

ISQM 1 · ISQM 2

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ISQM 1 — SoQM-এর ৬টা Components

Governance & Leadership — Quality-তে commitment, tone at the top
Relevant Ethical Requirements — IESBA Code সহ সব ethics মানা
Acceptance & Continuance — কোন clients নেওয়া হবে সেই criteria
Engagement Performance — Audit কীভাবে করতে হবে
Resources — Human, tech, intellectual resources
Information & Communication — তথ্য সঠিকভাবে flow হচ্ছে কিনা

ISQM 2 — Engagement Quality Review (EQR)

High-risk engagements-এ EQR mandatory
Listed companies-এর audit-এ always required
EQR = engagement team-এর বাইরের senior person
Hot review = report issue-এর আগে ✅ (ISQM 2 requires this)
Cold review = report issue-এর পরে
EQR refuse করলে report issue করা যাবে না

Chapter 5 Key Takeaways

ISQM 1: SoQM 6 components ISQM 2: EQR for high-risk Hot review = before report Listed companies = always EQR

📌 Key Topics

ISQM 1 SoQM 6 componentsISQM 2 EQRHot review vs Cold reviewClient acceptance criteriaWhy quality management matters

💡 Examples & Analogies

🏭 Quality Analogy

একটা factory-তে সব workers আলাদা quality-র product বানালে brand damage হয়। Audit firm-এও same — ISQM 1 নিশ্চিত করে সব audit একই standard-এ হয়।

🔍 EQR Example

Tk 500 crore turnover-এর listed company-র audit — EQR mandatory। Engagement partner-এর বাইরের senior partner রিপোর্ট issue-এর আগে পুরো file review করবেন।

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5.1 ISQM 1 — SoQM Components বিস্তারিত

Component	কী করে?	Example Objective
Governance & Leadership	Quality-র প্রতি firm-এর commitment প্রতিষ্ঠা করা	Ethics policy, tone at the top
Ethical Requirements	IESBA Code সহ সব ethical requirements মানা	Independence checks, conflict screening
Acceptance & Continuance	Appropriate clients নেওয়া এবং রাখার criteria	Client integrity assessment
Engagement Performance	Audit কীভাবে direction, supervision, review হবে	Review procedures, consultation policy
Resources	Competent staff, technology, intellectual resources	Training programs, audit software
Information & Communication	তথ্য সঠিকভাবে flow হচ্ছে কিনা	Engagement management system
Monitoring & Remediation	SoQM কাজ করছে কিনা দেখা, deficiencies fix করা	Annual quality inspections

5.2 EQR — কখন Mandatory?

ISQM 2 অনুযায়ী Engagement Quality Review (EQR) mandatory যখন: (1) Listed companies-এর statutory audit, (2) Firm নিজেই high-risk হিসেবে designate করেছে, (3) Laws বা regulations require করে। EQR-কে engagement team-এর বাইরের কেউ হতে হবে এবং report issue করার আগে (hot review) review complete করতে হবে।

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Accepting Engagements

ISA 210 · Companies Act 1994

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Pre-Engagement Checks (৫টা)

Independence: কোনো threat আছে কিনা
Competence: Firm-এর প্রয়োজনীয় expertise আছে কিনা
Resources: Enough staff এবং time আছে কিনা
Integrity: Management কেমন? কোনো previous issues?
Predecessor contact: আগের auditor-এর কাছ থেকে কোনো problem ছিল কিনা

Engagement Letter (ISA 210) — Contents

Audit-এর objective এবং scope
Auditor-এর responsibilities
Management-এর responsibilities
Financial reporting framework (IFRS/BAS)
Expected form of audit report
Fee arrangement
Materiality-র mention
Records এবং personnel-এ access

Companies Act 1994 — Appointment & Removal

First auditor: Board of Directors appoint করে
Subsequently: AGM-এ shareholders appoint করে
Removal: AGM-এ proper notice দিয়ে shareholders remove করতে পারে, ICAB-কে জানাতে হবে
Resignation: Resignation statement দিতে হবে — কেন resign করছেন তা explain করতে হবে
Change in appointment: নতুন auditor predecessor-এর সাথে communicate করবে

Lowballing কী?

Tender process-এ অনেক কম fee quote করে bid জেতা। Ethically wrong না, কিন্তু safeguards দরকার। অতিরিক্ত কম fee-তে proper quality বজায় রাখা কঠিন হয়।

Chapter 6 Key Takeaways

5 pre-engagement checks ISA 210: Engagement letter Companies Act 1994: AGM appointment Lowballing: not wrong but safeguards needed Predecessor communication

📌 Key Topics

Tendering processLowballing risk5 pre-engagement checksEngagement letter ISA 210Companies Act 1994 appointmentPredecessor communication

💡 Examples & Analogies

💼 Lowballing Example

Firm A bids Tk 5 lakh, Firm B bids Tk 50 lakh। Company chooses Firm A। কিন্তু Tk 5 lakh-এ proper audit কি সম্ভব? Lowballing-এ quality compromise হওয়ার risk — তাই safeguards দরকার।

📋 Engagement Letter Story

Verbal agreement নয় — সব লিখিতভাবে। Engagement letter ছাড়া audit শুরু করলে later দুটো party-র মধ্যে dispute হলে কোনো proof নেই। ISA 210 এজন্যই written letter require করে।

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6.1 Tender Process — Details

Tender-এ firms জানায়: (1) Team-এর qualifications ও experience, (2) Proposed audit approach ও timeline, (3) Fee proposal। Fee শুধু একমাত্র criterion না — quality, experience, industry knowledge সব বিবেচনা করা হয়।

6.2 Engagement Letter Contents (ISA 210)

Item	Details
Objective & scope	কী audit হবে, কোন financial reporting framework
Auditor responsibilities	ISAs অনুযায়ী audit করা, opinion দেওয়া
Management responsibilities	FS prepare করা, records access দেওয়া
Report form	Expected auditor's report format
Fee arrangement	Billing basis, payment terms
Other services	Tax, advisory — যদি থাকে

6.3 Predecessor Auditor Communication

নতুন auditor-কে client-এর permission নিয়ে predecessor-এর সাথে communicate করতে হবে। জিজ্ঞেস করতে হবে: কোনো fee outstanding আছে কিনা, কোনো professional disagreement ছিল কিনা, management integrity নিয়ে কোনো concern আছে কিনা। যদি predecessor কোনো concern জানায়, নতুন auditor carefully consider করবেন।

📎 Resources

07

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Planning

ISA 300 · ISA 320

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বিষয়	Audit Strategy	Audit Plan
Level	High-level, general	Detailed, specific
Contents	Scope, timing, direction, team size	Specific tests, who does what, when
Analogy	War strategy — কোথায় আক্রমণ	Battle plan — কে কোথায় যাবে

Materiality — Key Numbers

Planning Materiality = 5–10% of PBT | Performance Materiality = 50–75% of Planning | Trivial = 5% of Planning

Materiality — 3 Levels (ISA 320)

Planning Materiality: Overall threshold — 5-10% of PBT, or 1-2% of Revenue, or 1-2% of Total Assets
Performance Materiality: Individual item threshold — 50-75% of planning materiality — কারণ ছোট errors মিলে বড় হতে পারে
Trivial/Clearly Inconsequential: 5% of planning materiality — এর নিচে document-ই করা হয় না

Materiality — Practical Example

Company PBT = ১ কোটি টাকা
Planning Materiality = ১ কোটি × ৭% = ৭ লাখ
Performance Materiality = ৭ লাখ × ৬০% = ৪.২ লাখ
Trivial = ৭ লাখ × ৫% = ৩৫ হাজার

৫ লাখ-এর misstatement পাওয়া গেলে → Material! (৪.২ লাখের বেশি)

🎯

Exam Tip — Materiality Calculation

Exam-এ materiality calculate করতে বললে: (১) basis choose করো (PBT/Revenue/Assets), (২) % apply করো, (৩) justify করো কেন এই basis বেছেছ। Performance materiality আলাদা calculate করো।

Chapter 7 Key Takeaways

ISA 300: Planning Strategy vs Plan distinction Planning: 5-10% of PBT Performance: 50-75% of planning Trivial: 5% of planning ISA 320: Materiality

📌 Key Topics

ISA 300 planningAudit strategy vs audit planMateriality ISA 320Planning = 5-10% PBTPerformance = 50-75%Trivial = 5%Analytical procedures

💡 Examples & Analogies

⚔️ War Analogy

Strategy হলো যুদ্ধের plan — কোথায় আক্রমণ করবো। Audit plan হলো সেই যুদ্ধে কোন সৈনিক কোথায় যাবে, কী করবে। Strategy general, plan specific।

🧮 Materiality Calculation

Company PBT = Tk 1 crore → Planning materiality = Tk 1cr × 7% = Tk 7 lakh → Performance materiality = Tk 7L × 60% = Tk 4.2 lakh → Tk 5 lakh misstatement পেলে? Material! (4.2 লাখ ছাড়িয়ে গেছে)

💡 Why Materiality?

Audit সব কিছু 100% verify করে না। Material items-এ বেশি attention, immaterial-এ কম। এটাই audit cost-effective রাখে।

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7.1 ISA 300 — Planning Process

Planning আগে হওয়া দরকার কারণ: efficient audit নিশ্চিত করে, significant risk areas-এ focus করা যায়, appropriate team assign করা যায়, সময়মতো শেষ হয়।

7.2 Materiality Calculation — বিস্তারিত

Basis	% Range	কখন Use করবে?
Profit Before Tax (PBT)	5–10%	Profit-making companies-এর জন্য সবচেয়ে common
Revenue/Turnover	0.5–1%	যখন PBT negligible বা loss হচ্ছে
Total Assets	1–2%	Asset-heavy companies (banks, property)
Net Assets/Equity	1–5%	Not-for-profit entities, balance sheet focus

Materiality Calculation Example

Company PBT = Tk 50 lakh
Planning Materiality = Tk 50L × 7% = Tk 3.5 lakh
Performance Materiality = Tk 3.5L × 60% = Tk 2.1 lakh
Trivial threshold = Tk 3.5L × 5% = Tk 17,500
→ Tk 2.5 lakh misstatement = material (performance materiality ছাড়িয়ে গেছে)

7.3 Specific Materiality

কিছু items quantitatively ছোট হলেও qualitatively material হতে পারে। Example: Directors' remuneration, related party transactions, regulatory compliance items — এগুলো ছোট amount হলেও users-দের কাছে sensitive।

📎 Resources

08

Medium

Understanding the Entity & Its Environment

ISA 315 (Revised)

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Sources of Information

Internal: Client personnel, management accounts, board minutes, policy manuals, prior year files, contracts
External: Credit reference agencies, industry trade journals, RJSC filings, economic reports, competitor analysis
ISA 315: inquiry, analytical procedures, observation, inspection

PEST Analysis

P — Political/Legal: Government policy, regulatory changes, Companies Act 1994
E — Economic: Inflation, exchange rates, industry trends, RMG sector
S — Social: Demographics, consumer behavior, workforce
T — Technological: IT systems, bKash, automation, cyber risks

🇧🇩 কেন Business বোঝা দরকার?

ISA 315 require করে auditor-কে entity, environment আর internal controls বুঝতে হবে। না বুঝলে key risks miss হবে, audit plan ভুল হবে এবং negligence claims হতে পারে। বিশেষত Bangladesh-এ garments, banking, NGO sector-এর specific risks জানা দরকার।

Chapter 8 Key Takeaways

ISA 315: understand entity Internal + external sources PEST: Political, Economic, Social, Tech Foundation for risk assessment

📌 Key Topics

ISA 315 revisedWhy understand businessInternal + external sourcesPEST analysisBangladesh PEST factorsInternal controls understanding

💡 Examples & Analogies

🏭 Audit Without Understanding

একজন doctor যদি patient-এর medical history না জেনেই prescription দেন — বিপজ্জনক। Auditor-ও client-এর business না বুঝে audit করলে key risks miss হবে।

🇧🇩 Bangladesh PEST

P: Companies Act 1994, BSEC regulations। E: Garments sector (80%+ exports), remittance। S: bKash/Nagad revolution। T: NBR online tax filing, cyber risks।

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8.1 ISA 315 — Risk Assessment Procedures

Procedure	কী করা হয়?	Example
Inquiries	Management ও staff-কে জিজ্ঞেস করা	CFO-কে major risks সম্পর্কে জিজ্ঞেস করা
Analytical procedures	Data analyse করে unusual patterns খোঁজা	Revenue growth ratio analysis
Observation	Processes দেখা	Warehouse operations observe করা
Inspection	Documents দেখা	Board minutes, contracts পড়া

8.2 Bangladesh PEST Analysis

Factor	Bangladesh-Specific Considerations
Political	Political stability, election cycles, regulatory changes (BSEC, BB), Export policy
Economic	Garments sector dominance (80%+ exports), remittance flows, inflation, BDT exchange rate
Social	Young workforce, urbanisation, mobile banking (bKash/Nagad) adoption
Technological	NBR online tax filing, digital banking, e-commerce growth, cyber security risks

📎 Resources

09

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Risk Assessment

ISA 315 · ISA 570

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Audit Risk = Inherent Risk × Control Risk × Detection Risk

AR = IR × CR × DR | শুধু DR auditor control করতে পারেন

3 Types of Risk — Explained

Inherent Risk (IR): Controls ছাড়া account balance-এ misstatement হওয়ার chance। Nature-এর উপর depend করে। Auditor control করতে পারেন না।
Control Risk (CR): Company-র internal controls fail করার risk। Client-এর উপর depend করে। Auditor control করতে পারেন না।
Detection Risk (DR): Auditor নিজে material misstatement miss করার risk। শুধু এটা auditor কমাতে পারেন — বেশি testing করে।

High Inherent Risk কখন?

Complex transactions (derivatives, leases)
Judgment-based estimates (provisions, fair values)
Cash transactions (easily misappropriated)
Related party transactions
New accounting standards apply হচ্ছে
Management override সম্ভব এমন areas

Business Risk — 3 Categories

Financial Risk: Cash flow problems, overtrading, high debt, forex risk
Operational Risk: Key customer loss, IT failure, supply chain, key staff departure
Compliance Risk: Regulatory fines, license loss, legal proceedings

Going Concern — ISA 570 Indicators

Financial: Negative cash flow, loan covenant breach, current liabilities > current assets, operating losses
Operating: Key management left, major customer lost, loss of license
Other: Legal proceedings, pending legislation, uninsured disasters
Auditor ≥12 months forward দেখেন

🎯

Exam Tip — Risk Formula Logic

যদি IR এবং CR বেশি হয় → DR কমাতে হবে → বেশি substantive testing করতে হবে। "Inverse relationship between DR and (IR×CR)" — এটা exam-এ লিখলে marks পাবে।

Chapter 9 Key Takeaways

AR = IR × CR × DR DR = only auditor-controlled High IR/CR → low DR → more testing Significant risks = special attention Going concern: ISA 570, 12 months Business risk: Financial, Operational, Compliance

📌 Key Topics

Business risk 3 typesAudit risk = IR × CR × DRDR only auditor controlsSignificant risksGoing concern ISA 570 indicatorsISA 230 documentation

💡 Examples & Analogies

🎯 AR = IR × CR × DR

Garments company: Complex export transactions (High IR) + Weak payroll controls (High CR) → DR must be very LOW → Extensive substantive testing on payroll & revenue required।

🔍 DR Explained

IR আর CR auditor control করতে পারেন না — এগুলো client-এর। কিন্তু DR auditor নিজের testing-এর মাধ্যমে কমাতে পারেন। High IR+CR → DR কমাও → বেশি test করো।

⚠️ Going Concern Signal

Indicators: Negative cash flow, loan covenant breach, current liabilities > current assets, major customer lost, legal proceedings। Auditor 12 months forward দেখেন।

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9.1 Audit Risk Model — Detailed Analysis

Risk Component	কে Control করে?	High Risk কখন?	Auditor-এর Response
Inherent Risk (IR)	Client (nature of business)	Complex transactions, high estimates, fraud-prone areas	Increase substantive testing
Control Risk (CR)	Client (internal controls)	Weak controls, override possible, no reconciliations	Do not rely on controls, more substantive
Detection Risk (DR)	Auditor (testing)	Less testing, poor sampling, inexperienced staff	More testing, better sampling, senior staff

Audit Risk Worked Example

Client: A garments company with complex export transactions (High IR), weak controls over payroll (High CR).
→ Therefore DR must be set very LOW
→ Auditor must do extensive substantive testing on payroll and export revenue
→ Senior staff should be assigned to these areas

9.2 Going Concern — ISA 570 Full Checklist

Category	Indicators of Going Concern Doubt
Financial	Net liability position, negative operating cash flows, fixed-term borrowings maturing, loan covenant breach, substantial operating losses, overdue payables
Operating	Key management departure, loss of major franchise/market, labour difficulties, shortage of important supplies, loss of principal customer
Other	Legal proceedings, regulatory non-compliance, pending legislation, uninsured catastrophes, political/economic changes (e.g. war, disaster)

📎 Resources

10

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Audit Approach (Procedures)

ISA 330 · ISA 501 · ISA 505 · ISA 520 · ISA 610 · ISA 620

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Financial Statement Assertions — CAVAT

C A V A T

CCompleteness — সব transactions recorded? কিছু missing নেই?

AAccuracy — Numbers সঠিক? Calculation ঠিক?

VValuation — Assets/liabilities সঠিক value-এ? IFRS অনুযায়ী?

AAllocation/Cut-off — সঠিক period-এ recorded?

TTransactions (Occurrence/Existence) — Actually হয়েছে? Actually আছে?

Tests of Controls — Methods

Inspection: Authorization signatures, reconciliations দেখা
Observation: Cash count, stock take observe করা
Inquiry: Controls সম্পর্কে staff-কে জিজ্ঞেস করা
Re-performance: Control নিজে করে দেখা (reconciliation নিজে করা)

Substantive Procedures

Tests of Details: Physical verification, third-party confirmation, vouching, tracing, recalculation
Analytical Procedures: Reasonableness checks, prior year comparison, ratio analysis, budget vs actual
কিছু substantive procedures ALWAYS করতে হবে (শুধু controls-এ rely করা যাবে না)

Area	Assertion	Audit Procedure
Inventory — Existence	Existence	Year-end inventory count-এ attend করো (ISA 501), নিজে কিছু items count করো
Inventory — Valuation	Valuation	NRV calculate করো, post year-end sales price দেখো, slow-moving items identify করো
Receivables — Existence	Existence	Positive circularization — debtors-দের directly confirm করতে বলো
Receivables — Valuation	Valuation	Aged receivables list analyse, post year-end cash receipts check, provision review
Payables — Completeness	Completeness	Supplier statement reconciliation, post year-end payments check, negative circularization
Revenue — Occurrence	Occurrence	Sales invoices vouch to orders/despatch, IFRS 15 criteria check
Cut-off — All areas	Allocation	Year-end-এর আশেপাশের GRNs, dispatch notes, invoices examine করো

Positive vs Negative Circularization

Positive: "Please confirm you owed us Tk X as of [date]" — response না পেলে follow up করতে হয়। More reliable.
Negative: "Please inform us only if you do NOT agree with balance Tk X" — no response = agreement। Less reliable, used for payables.

Chapter 10 Key Takeaways

ISA 330: respond to assessed risks CAVAT: 5 assertions Tests of controls: IOIRP Substantive: details + analytical Inventory: attend count (ISA 501) Receivables: positive circularization Payables: supplier reconciliation ISA 620: experts · ISA 610: internal audit

📌 Key Topics

ISA 330 respond to risksCAVAT assertionsTests of controls 4 methodsSubstantive: details + analyticalInventory: count + NRV + cut-offReceivables: positive circularizationPayables: supplier reconciliationISA 620 expertsISA 610 internal audit

💡 Examples & Analogies

📦 Inventory Procedures

Year-end inventory count-এ attend করো (ISA 501) → নিজে কিছু items count করো → NRV calculate করো → Post year-end sales দেখো → GRN cut-off check করো।

📬 Circularization Types

Positive (receivables): "Please confirm you owed us Tk X" — response না পেলে follow up। Negative (payables): "Only reply if you disagree with Tk X" — no reply = agreement।

🎯 CAVAT Memory

Completeness: কিছু missing? | Accuracy: amount ঠিক? | Valuation: IFRS মতো valued? | Allocation/Cut-off: right period? | Transactions: actually happened/exists?

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10.1 Assertions — Full CAVAT Table with Tests

Assertion	Meaning	Typical Test
Completeness	সব recorded হয়েছে?	Search for unrecorded liabilities, GRN trace
Accuracy/Valuation	Correct amount-এ recorded?	Recalculation, reperformance, NRV check
Valuation (Assets)	IFRS basis-এ properly valued?	Impairment test review, fair value check
Allocation/Cut-off	Correct period-এ recorded?	Pre/post year-end invoices & GRNs inspect
Occurrence/Existence	Actually happened? Actually exists?	Physical verification, positive circularisation
Rights & Obligations	Company-র? Company-র দায়?	Title deeds, loan agreements inspect
Presentation & Disclosure	Properly disclosed?	IAS 1 disclosure checklist

10.2 Specific Area — Revenue Audit Procedures

Occurrence: Sample sales invoices vouch to customer orders, dispatch notes, and proof of delivery
Completeness: Analytical procedures — compare monthly revenue, check dispatch notes are invoiced
Accuracy: Recalculate invoice amounts, check credit notes
Cut-off: Last week of year GRNs and invoices — match to correct period
IFRS 15: Verify 5-step model applied — contract, performance obligations, transaction price, allocation, recognition

10.3 Data Analytics in Audit

Modern auditors use data analytics tools to: analyse 100% of transactions (not samples), identify unusual transactions automatically, compare current year vs prior year patterns, test journal entries for fraud indicators. ISA 315 now recognises technology-based audit evidence.

📎 Resources

11

Medium

Audits of Different Types of Entity

ISA 600 · Foreign Donations Act 2016

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NGO / Not-for-Profit Audit (Bangladesh)

Foreign Donations (Voluntary Activities) Regulation Act, 2016
NGO Affairs Bureau-এর requirements
Funds সঠিক purpose-এ ব্যবহার হয়েছে কিনা
Donor restrictions মানা হয়েছে কিনা
Standard ISA 700 report format ব্যবহার হয়
Charitable purpose-এর compliance check

Public Sector Audit

Comptroller & Auditor General (C&AG) audit করেন
Value for Money (VFM) audit: Economy, Efficiency, Effectiveness (3 E's)
Objective: accountability, not profit
Parliament-এ report করা হয়

Group Audit — ISA 600

Group auditor: পুরো group-এর responsible — overall strategy, instructions দেওয়া, component work review করা, final opinion দেওয়া
Component auditor: Individual subsidiary audit করে, group auditor-এর instructions follow করে
Component auditor-এর independence এবং competence verify করতে হবে
Significant components-এ group auditor নিজে visit করতে পারেন

Chapter 11 Key Takeaways

NGO: Foreign Donations Act 2016 Public sector: VFM audit (3 E's) Group audit: ISA 600 Group vs component auditor

📌 Key Topics

Non-specialised vs specialisedNGO Foreign Donations Act 2016Fund utilisation checkPublic sector VFM 3 EsC&AG auditGroup audit ISA 600Group vs component auditor

💡 Examples & Analogies

🏛️ VFM 3 Es Example

Government hospital: Economy = medicines কম দামে কেনা হয়েছে কিনা। Efficiency = doctors-per-patient ratio। Effectiveness = রোগী সুস্থ হওয়ার rate। Profit না — service quality measured।

🌍 Group Audit Example

ABC Group: Parent in Dhaka + 5 subsidiaries (2 in Chittagong, 1 in Sylhet, 2 abroad)। Group auditor (Dhaka) overall responsible। Component auditors subsidiary-র audit করে। Group materiality < component materiality।

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11.1 NGO Audit — Bangladesh Specific Requirements

Requirement	Details
Foreign Donations Act 2016	Foreign donations receive করতে NGO Affairs Bureau registration দরকার
Fund utilisation	Funds কি stated purpose-এ ব্যবহার হয়েছে সেটা verify করতে হবে
Donor restrictions	Restricted funds আলাদাভাবে account করা হয়েছে কিনা
Reporting	NGO Affairs Bureau-তে annual return জমা
Charitable purpose	Education, health, poverty relief — ISA 700 report format

11.2 Group Audit — ISA 600 Key Points

Group engagement partner পুরো group audit-এর responsible — component auditors-দের work-এর জন্যও
Component auditor-এর independence, competence, এবং regulatory environment verify করতে হবে
Significant components-এ group auditor নিজে specific procedures করতে পারেন
Inter-company transactions এবং eliminations verify করতে হবে
Group materiality vs component materiality — component-এ কম materiality use করা হয়

📎 Resources

12

🔥 High Priority

Audit Completion

ISA 560 · ISA 570 · ISA 580 · ISA 265

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Going Concern — ISA 570

Assumption: company আগামী ≥12 months চলবে
Financial indicators: Negative cash flow, loan covenant breach, current liabilities > current assets
Operating indicators: Key management departure, major customer lost
Other: Legal proceedings, uninsured disasters
Going concern doubt → audit report modify হতে পারে

Subsequent Events — ISA 560

Adjusting Events: Year-end-এ existing condition-এর প্রমাণ → FS adjust করতে হবে। Example: Year-end-এর customer পরে bankrupt হলে receivable write-off করো।
Non-Adjusting Events: Year-end-এর পরে নতুন condition → adjust নয়, কিন্তু disclose করো। Example: Post year-end factory fire।

Written Representations — ISA 580

Management লিখিতভাবে confirm করেন
FS give true and fair view
সব relevant information দেওয়া হয়েছে
সব fraud/potential fraud disclosed
সব related party transactions disclosed
Written reps refuse = scope limitation = modified opinion

ISA 265 — Control Deficiencies

Significant Deficiency: Management-এর attention দরকার এমন weakness — TCWG-কে written communication
Material Weakness: Material misstatement-এর reasonable possibility — serious!
Report করা হয় audit committee / board-কে

🎯

Adjusting vs Non-Adjusting — Quick Test

"Year-end-এ কি এই condition-এর evidence ছিল?" — YES = Adjusting (FS adjust করো)। NO = Non-Adjusting (শুধু disclose করো)।

Chapter 12 Key Takeaways

Going concern: ISA 570, 12 months Adjusting events: adjust FS Non-adjusting: disclose only Written reps: ISA 580 ISA 265: sig. deficiency vs material weakness

📌 Key Topics

Going concern ISA 570 12 monthsAdjusting eventsNon-adjusting eventsWritten representations ISA 580ISA 265 sig deficiency vs material weaknessISA 520 final analytical procedures

💡 Examples & Analogies

📅 Subsequent Events Test

Quick test: "Year-end-এ কি এই condition-এর evidence ছিল?" YES → Adjusting (FS adjust করো)। NO → Non-adjusting (শুধু disclose করো)।

📋 Adjusting Example

Year-end debtor Tk 50 lakh। Post year-end সে bankrupt হলো। Year-end-এ তার financial difficulty ছিল → Adjusting → Receivable write-off করো।

📋 Non-Adjusting Example

Year-end এর পরে factory-তে fire লাগলো। এটা year-end-এ ছিল না → Non-adjusting → Notes-এ disclose করো।

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12.1 Going Concern Audit Procedures

Management-এর going concern assessment review করা — কী assumptions used?
Budget, cash flow projections review করা — realistic কিনা
Board minutes review — going concern নিয়ে কোনো discussion আছে কিনা
Post year-end events consider করা — কোনো positive বা negative development?
Bank/lender-এর সাথে loan facilities সম্পর্কে inquire করা
At least 12 months from the date of the financial statements forward দেখতে হবে

12.2 Subsequent Events — ISA 560 Examples

Type	Example	Treatment
Adjusting	Year-end debtor পরে bankrupt হলো (দেনা year-end-এও ছিল)	Receivable write-off করো, provision adjust করো
Adjusting	Year-end inventory NRV এর নিচে sold হলো	Inventory write-down করো
Non-Adjusting	Major flood factory destroy করল (year-end-এর পরে)	Notes-এ disclose করো, amount estimate করো
Non-Adjusting	Acquisition announcement হলো post year-end	Notes-এ disclose করো

12.3 Uncorrected Misstatements

Audit-এর সময় পাওয়া misstatements দুটো ভাগ: Corrected (management ঠিক করে দিয়েছে) এবং Uncorrected (management ঠিক করেনি)। Auditor সব uncorrected misstatements accumulate করেন। যদি total materiality ছাড়িয়ে যায় → modified opinion consider করতে হবে। Management-কে correcting journal entries দেওয়ার সুযোগ দিতে হবে।

📎 Resources

13

🔥 High Priority

Reporting

ISA 700 · ISA 705 · ISA 706 · ISA 701

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Opinion Type	কখন?	Report Wording
Unmodified (Clean)	No problems	"give a true and fair view"
Qualified ("Except for")	Material কিন্তু NOT pervasive	"Except for [matter], …true and fair view"
Adverse	Material AND pervasive (misstatement)	"do NOT give a true and fair view"
Disclaimer	Material AND pervasive (scope limitation)	"We do not express an opinion"

Modified Opinion Decision Tree

Problem আছে? → Material কিনা? → Pervasive কিনা? → Misstatement নাকি Scope limitation?

ISA 700 — Report Structure (11 Elements)

Title: "Independent Auditor's Report"
Addressee: "To the Shareholders of…"
Auditor's Opinion
Basis for Opinion
Key Audit Matters (listed only)
Going Concern (if applicable)
Other Information (Directors' Report)
Responsibilities of Management
Responsibilities of Auditor
Other Reporting Responsibilities
Signature, Date, Address

ISA 706 — Emphasis of Matter

Opinion modify করার দরকার নেই
কিন্তু users-দের attention দরকার এমন matter
Example: Going concern material uncertainty but properly disclosed
Other Matter paragraph: FS-এ disclosed নেই কিন্তু users-দের জানা দরকার

ISA 701 — Key Audit Matters (KAMs)

Listed companies ONLY
Most significant matters in auditor's judgement
Report করা হয়: কী, কেন significant, কীভাবে addressed

🎯

"Pervasive" বোঝার সহজ উপায়

Pervasive = misstatement এত ব্যাপক যে financial statements-এর অনেক elements affected, বা fundamental element affected। Isolated problem = Qualified। Widespread/fundamental problem = Adverse বা Disclaimer।

Chapter 13 Key Takeaways

ISA 700: 11 elements Qualified: material, not pervasive Adverse: material + pervasive (misstatement) Disclaimer: material + pervasive (scope) ISA 706: Emphasis of matter ISA 701: KAMs (listed only)

📌 Key Topics

ISA 700 11 elementsUnmodified = clean opinionQualified: material not pervasiveAdverse: material AND pervasiveDisclaimer: scope limitation pervasiveISA 706 emphasis of matterISA 701 KAMs listed only

💡 Examples & Analogies

⚖️ Modified Opinion Decision

Problem আছে? → Material? → Pervasive? → Yes misstatement = Adverse। Yes scope = Disclaimer। Not pervasive = Qualified।

🎯 Qualified Example

Inventory-র একটা category-র valuation নিয়ে disagreement (Tk 5 lakh) — material কিন্তু rest of FS ঠিক আছে → "Except for inventory valuation, FS give a TFV।"

💥 Adverse Example

Revenue recognition policy সম্পূর্ণ ভুল — profit, assets, equity সব affect করে = Pervasive → Adverse: "FS do NOT give a true and fair view।"

📌 KAM vs EOM

KAM (ISA 701): Listed companies only, most significant audit matters। EOM (ISA 706): All entities, draw attention to properly disclosed matter।

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13.1 Modified Opinion — Decision Tree বিস্তারিত

Situation	Material?	Pervasive?	Opinion
Misstatement (auditor disagrees)	No	N/A	Unmodified (clean)
Misstatement	Yes	No	Qualified ("Except for...")
Misstatement	Yes	Yes	Adverse ("Do not give TFV")
Scope limitation (can't get evidence)	Yes	No	Qualified ("Except for...")
Scope limitation	Yes	Yes	Disclaimer of opinion

13.2 "Pervasive" — কীভাবে Determine করবেন?

ISA 705 অনুযায়ী effects are pervasive যখন:

Financial statements-এর অনেক elements affected — এবং isolated না
Limited specific elements-এ সীমাবদ্ধ হলেও এগুলো financial statements-এর fundamental part
Undisclosed হলে financial statements-কে wholly misleading করে

Practical Example — Qualified vs Adverse

Qualified: একটা subsidiary-র inventory Tk 5 lakh overstated — material কিন্তু rest of FS ঠিক আছে.
Adverse: Revenue recognition policy সম্পূর্ণ wrong — এটা profit, assets, equity সব affect করে = pervasive.

13.3 Emphasis of Matter vs KAMs

	Emphasis of Matter (ISA 706)	Key Audit Matters (ISA 701)
Who?	All entities	Listed entities only
Purpose	Draw attention to properly disclosed matter	Most significant audit judgements
Example	Going concern uncertainty	Revenue recognition complexity, impairment
Effect on opinion	No modification	No modification

📎 Resources

14

Medium

Other Assurance Engagements

ISAE 3000 · ISRE 2400 · ISRS 4400 · ISRS 4410

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Type	Standard	Assurance Level	Output
Statutory Audit	ISAs	Reasonable (High)	Positive opinion
Review	ISRE 2400 / 2410	Limited (Moderate)	Negative conclusion
Agreed-Upon Procedures	ISRS 4400	None	Findings only
Compilation	ISRS 4410	None at all	No conclusion

ISAE 3000 — Other Assurance

Subject matter = NOT historical financial information
Examples: ESG/sustainability reports, internal control reports, compliance reports
Same principles as audit — can be reasonable or limited
Emerging area: ESG assurance growing rapidly

PFI — ISAE 3400

Prospective Financial Information (forecasts/projections)
Forecast: Management-এর best estimate (expected to happen)
Projection: "What if" scenarios (hypothetical)
Maximum = Limited assurance only (কারণ future uncertain)
Reasonable assurance on future = impossible

Review Conclusion — Negative Wording Example

"Nothing has come to our attention that causes us to believe that these financial statements do not give a true and fair view in accordance with [framework]."

Chapter 14 Key Takeaways

ISAE 3000: non-historical assurance Review: limited, negative conclusion AUP: no assurance, findings only Compilation: no assurance at all PFI: max limited assurance ESG: emerging assurance area

📌 Key Topics

ISAE 3000 non-historical assuranceReview ISRE 2400 limited assuranceAUP ISRS 4400 no assuranceCompilation ISRS 4410 no assuranceDue diligencePFI ISAE 3400 max limitedESG emerging area

💡 Examples & Analogies

📊 Assurance Pyramid

Statutory Audit → highest assurance (reasonable)। Review → moderate (limited)। Agreed-Upon Procedures → no assurance, just findings। Compilation → no assurance at all। নিচে নামলে কাজ কমে, assurance কমে।

🔍 AUP Example

Bank বলল "চেক করো receivables aging analysis কীভাবে করা হয়েছে।" Auditor সেটা check করে শুধু findings বলবে — "aging যেভাবে calculate হয়েছে সেটা হলো X।" কোনো conclusion দেবে না।

🌱 ESG Assurance

Companies ESG reports publish করছে — carbon emissions, diversity data। ISAE 3000 framework exist করে। Mandatory না বেশিরভাগ দেশে, কিন্তু investors demand করছে।

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14.1 Assurance Pyramid — Full Details

Engagement Type	Standard	Assurance	Procedures	Conclusion Wording
Statutory Audit	ISAs	Reasonable (High)	Extensive testing	"Gives a true and fair view"
Review (ISRE 2400)	ISRE 2400	Limited (Moderate)	Mainly inquiry & analytical	"Nothing has come to our attention..."
Agreed-upon Procedures	ISRS 4400	None	Specific agreed procedures	Factual findings only
Compilation	ISRS 4410	None	Prepare using client data	"We have not audited these statements"

14.2 ISAE 3000 — Non-Financial Assurance

ISAE 3000 apply হয় যখন subject matter historical financial information না। Examples:

ESG/sustainability reports (carbon emissions, diversity metrics)
Internal control effectiveness reports
Compliance with grant conditions বা contracts
Corporate governance processes
Information systems security

14.3 Due Diligence — What it Covers

Financial health: assets, liabilities, working capital, cash flows
Legal issues: ongoing litigation, regulatory violations
Contracts: major customer/supplier contracts, expiry dates
Tax: contingent tax liabilities, tax compliance history
Operational: key employees, systems, processes
Output: report of findings — no assurance opinion given

📎 Resources

ISA

Must Memorise

Complete ISA Reference Table

ISA	Title	Chapter
ISA 200	Overall Objectives of the Independent Auditor	Ch 1
ISA 210	Agreeing the Terms of Audit Engagements	Ch 6
ISA 230	Audit Documentation	Ch 9
ISA 240	The Auditor's Responsibilities Relating to Fraud	Ch 2
ISA 250	Consideration of Laws and Regulations	Ch 2
ISA 260	Communication with Those Charged with Governance	Ch 13
ISA 265	Communicating Deficiencies in Internal Control	Ch 12
ISA 300	Planning an Audit of Financial Statements	Ch 7
ISA 315	Identifying and Assessing Risks of Material Misstatement	Ch 8, 9
ISA 320	Materiality in Planning and Performance	Ch 7
ISA 330	The Auditor's Responses to Assessed Risks	Ch 10
ISA 501	Audit Evidence — Specific Considerations (Inventory)	Ch 10
ISA 505	External Confirmations (Circularization)	Ch 10
ISA 520	Analytical Procedures	Ch 12
ISA 550	Related Parties	Ch 9
ISA 560	Subsequent Events	Ch 12
ISA 570	Going Concern	Ch 9, 12
ISA 580	Written Representations	Ch 12
ISA 600	Special Considerations — Group Audits	Ch 11
ISA 610	Using the Work of Internal Auditors	Ch 10
ISA 620	Using the Work of an Auditor's Expert	Ch 10
ISA 700	Forming an Opinion and Reporting	Ch 13
ISA 701	Communicating Key Audit Matters	Ch 13
ISA 705	Modifications to the Opinion in the Auditor's Report	Ch 13
ISA 706	Emphasis of Matter and Other Matter Paragraphs	Ch 13
ISQM 1	Quality Management for Firms (SoQM)	Ch 5
ISQM 2	Engagement Quality Reviews	Ch 5
ISAE 3000	Assurance Engagements Other than Audits	Ch 14
ISRE 2400	Review of Historical Financial Statements	Ch 14
ISRS 4400	Agreed-Upon Procedures	Ch 14
ISRS 4410	Compilation Engagements	Ch 14

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Audit & Assurance — 48-hour Exam Prep

ICAB CA Professional Level · 14 Chapters · 426 Pages

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Audit &
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Reintroduction to Audit & Assurance

Responsibilities

Professional Standards

Professional Ethics

Quality Management

Accepting Engagements

Planning

Understanding the Entity & Its Environment

Risk Assessment

Audit Approach (Procedures)

Audits of Different Types of Entity

Audit Completion

Reporting

Other Assurance Engagements

Complete ISA Reference Table

Audit & Assurance — 48-hour Exam Prep

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Audit &AssuranceComplete Notes

Reintroduction to Audit & Assurance

Responsibilities

Professional Standards

Professional Ethics

Quality Management

Accepting Engagements

Planning

Understanding the Entity & Its Environment

Risk Assessment

Audit Approach (Procedures)

Audits of Different Types of Entity

Audit Completion

Reporting

Other Assurance Engagements

Complete ISA Reference Table

Audit & Assurance — 48-hour Exam Prep

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