Statutory Audit and Audit Readiness in Nepal — Evidence Before the Auditor Arrives

The checklist organises evidence; it does not predetermine the auditor's procedures. Management should resolve differences and explain estimates rather than ask the auditor to invent missing records. Keep a version-controlled request list with owner, status and supporting file.

A trading company presents inventory NPR 5,000,000 in its trial balance, but count records support NPR 4,700,000. Investigate cut-off, valuation, unrecorded movement and count errors, approve any correction and retain the bridge. Do not simply change the count sheet to match the ledger. The auditor then evaluates the evidence and the financial-statement effect independently.

Confirm auditor eligibility, valid appointment, independence, engagement terms and the required report recipients. A fee payment does not create a lawful appointment. Communicate related parties, disputes, suspected fraud, subsequent events and regulator notices promptly through the agreed channel.

Maintain a final adjustment log, management representations, approved financial statements and the issued report. Management remains responsible for the statements and internal controls. An unmodified opinion is not a guarantee that every transaction is correct or that the entity complied with every law. Audit readiness means records and explanations are available for appropriate assurance work, not that management can dictate the opinion.

Begin by reconciling the trial balance to bank, customer, supplier, inventory, asset and payroll schedules. Resolve unidentified entries, assess cut-off and record supported adjustments. The auditor needs evidence of the balances and transactions, not only a formatted financial-statement file.

Keep an adjustment register showing the issue, proposed entry, supporting evidence, management decision and final posting. When an auditor proposes an adjustment, management assesses and approves the accounting treatment; the signed audit report does not replace that responsibility. Updated schedules should reflect the final ledger consistently so that the statement, note and tax computation do not use different versions of the same balance.

Estimates, related parties, legal claims and going concern often require information outside ordinary bookkeeping. Assign an owner to each working and obtain relevant evidence early. Forecasts should explain assumptions and supporting information; legal assessments should identify the matter and evidence considered; related-party records should cover both relationships and transactions.

For example, a company has a receivable that remained unpaid after several revised promises. The close includes an age analysis, correspondence, disputes and the recovery assessment under the reporting framework. Merely obtaining the customer's signature confirming the balance would address one question but would not establish that the amount is recoverable.

ICAN's NSA 2024 implementation table makes the main standards mandatory for audits of financial-statement periods beginning on or after 1 Shrawan 2082. It separately identifies 1 Shrawan 2083 for the listed revised quality-management, group-audit and AUP standards. The audit plan should select the effective requirements for its period and engagement.

Read the final report for the actual opinion, any modification, material uncertainty or other required communication. Discuss management-letter findings and assign corrective actions with evidence of completion. An unmodified opinion does not promise that every control is effective or that every future tax position will be accepted. The useful outcome is a supported set of statements and a clear understanding of both the opinion and outstanding recommendations.