Pie and ChipsPlanning meeting

The planning should be documented fully and approved by the partner before the start of fieldwork. It is possible that evidence of this approval is to be found elsewhere on the file, but it would have been better if the partner had signed off the meeting minutes as soon as they were available.Going concern and subsequent events

• The subsequent events review should be updated to the date of signing the audit report. The review should arguably be more rigorous and comprehensively documented because of the lack of financial facilities and the raised risk of going concern issues.

• It may be that the letter of comfort from the holding company is sufficient to eliminate this risk, but this should be made clear on the file, and the checklist still needs updating.

• The fact that the parent is listed overseas does not, of itself, mean that the comfort letter is valid evidence that Cello Ltd is a going concern and there may be an increased level of risk, because of the parent’s listed status.

Noncurrent assets• Noncurrent assets might be considered low risk, but the total is

material even if the current year’s additions may not be in themselves.

• This section of the file demonstrates a lack of clarity in the approach to the audit and the firm’s basic procedures for initialling and dating working papers have not been observed, albeit in what may be a relatively low risk area.

Receivables• The un-cleared item may not be material as such, but it may well

be in excess of the tolerable error threshold. • The item should have been followed up and other evidence

obtained and, if this was impossible, the potential misstatement should have been calculated in theoretical terms to see if the misstatement in the financial statements as a whole might have been material.