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AT1=Audit team responsible for usual audit of cheetah co
AT2=audit team responsible for non-audit services of cheetah co.ma’am in the answer its written that self review threat arises as a result of audit team( AT2) reviewing(interim review needed before approaching bank) the work of another team within the audit firm( AT1).
but my concern is does AT1, actually review the interim FSs in the first place? I mean isn’t it only concerned with final year end draft FSs?
moreover even if I assume that AT1 does review the interim FSs as a part of audit of cheetah co., why would their initial review as a part of audit wouldn’t be fine for mgt of cheetah co? I mean why is there a need for AT2 to review the interim FSs again once after AT1 has already reviewed it as a part of audit?
If a company publishes interim financial statements for q/e 31 Mar, 30 Jun and 30 Sept do you think the audit team engaged on the y/e audit would not look at these at all? Maybe do some analytical procedures on them?
your answer is very well noted ma’am. But I think you forgot to answer the second part of my question… this one:
moreover even if I assume that AT1 does review the interim FSs as a part of audit of cheetah co., why would their initial review as a part of audit wouldn’t be sufficient for mgt of cheetah co? I mean why is there a need for AT2 to review the interim FSs again once after AT1 has already reviewed it as a part of audit?
The answer is presuming that the firm’s representative would look at (“review” does not have to be a formal process) the information that is being provided in support of the loan. Since that information includes the “output” of others employed by the firm, it falls within the definition of self-review threat.
You don’t have to understand every sentence in a published answer – especially re ethics/professional issues they can be a bit obscure.
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