Audit + Internal Control + Risk

Core concepts

1. 01Audit response to identified risk: ToC + substantive procedures.
2. 02Internal Financial Controls (IFC) reporting under Sec 143(3)(i) — judgement & disclosure.
3. 03Fraud risk: SA 240 — auditor's response (revenue presumption, management override).
4. 04Forensic audit triggered by red flags — separate engagement, not statutory audit.
5. 05ESG audit / Business Responsibility Sustainability Reporting (BRSR) — emerging assurance area.

Exam-critical pointers

• ⭐Material weakness in IFC mandates qualification of opinion on IFC (separate from FS opinion).
• ⭐Sec 143(12) fraud reporting threshold: ≥ ₹1 cr to CG, < ₹1 cr to audit committee.
• ⭐BRSR Core (top 1000 listed) — assurance by FY 2023-24 onwards.
• ⭐Money laundering — auditor's responsibility under PMLA reporting (suspicious transactions).