1. Why should I use ADAT?
ADAT is a one stop solution for:
A secured digitisation of the audit file with ease of use
An audit file which is scalable to the size and complexities of the audit engagement
An audit file which is compliant with the risk and control-based audit approach as required under the Standards of Auditing
Documenting the audit work electronically in a secured cloud-based technology platform
Some of the salient features of the ADAT which will help the audit firms to document their audit work securely ensuring compliance with standards of auditing as set by Regulators and to meet their expectations for monitoring and inspection:
Robust audit firm, audit engagement and team onboarding
Secure environment to the clients of the audit firm to share their information with the audit firm
Audit file can be accessed only by the Authorised Personnel ensuring integrity of audit file
Joint audit related discussion templates
Consolidation related templates
Detailed questionnaire for Understanding the Entity, Management, TCWG, Account Balances and so on
Exhaustive library of risks, controls, procedures (including Information Technology elements)
Fraud risk questionnaire and assessments
Focused Related Party and Going Concern risk assessment
Checklist on Accounting Standard - disclosures, Standards on Auditing, CARO, Companies Act and many more
Trial Balance import feature with mapping to Schedule III line items and creation of the testing sheets for account balances
Engagement quality control review (EQCR) related templates
Tracking Workpaper changes post audit report date till Archival
Archival of audit file - ensure the integrity of the Audit File and prevent any tampering thereof
Permanent audit file checklist
Dashboards to partners and managers on the status of their respective audit engagements
And many more
2. What if we use ADAT for one year and do not renew for the next year?
The option to discontinue the ADAT is available with the audit firms. However, we do not encourage audit firms to discontinue the use of ADAT as the audit files already archived by using ADAT will not be functional without the ADAT tool.
In a scenario wherein the audit firm decides to discontinue the ADAT, there are two options available with the audit firms with respect to the audit files archived / in progress using ADAT:
Retain the audit files in the ADAT tool by paying a yearly maintenance fees per audit file which will allow audit firms to access the stored audit file. Or
True and Fair will provide the readable version of all the documents in the audit file by paying one-time fee per audit file.
3. Will ADAT carry any tools for sampling including analytics?
Sampling including analytics tools will be developed by True and Fair. It is still not decided on offering the same along with ADAT since the type of tool to be used in an engagement will vary based on the accounting application used by the audit client. It is likely that these tools will be made available separately on a separate subscription.
4. Will ADAT be available on mobile?
The current version of ADAT will not be accessible on mobile.
5. When do you expect to launch ADAT?
True and Fair is expecting ADAT to be launched by FY 23-24 ready for use for March 2024 audits24.
6. What standard formats and templates of communications and reports will be included within ADAT (e.g. Engagement Letter, Confirmations, Audit Report, etc.)
The standard formats and templates of communications and reports will be part of the Technical Library provided by True and Fair Professionals Network, which would not be made available as part of ADAT. Such templates will be available on subscription basis (it’s a separate subscription than that of ADAT). The following formats (illustrative) would be part of the Technical Library.
Eligibility letter
Document for evaluation of the client- Know Your Client (KYC)
Request for ‘No Objection Certificate’ (NOC) from predecessor auditor
Acceptance letter
Engagement letter
Communication of resignation / intent to resign
Declaration of independence
Understanding joint auditors and joint audit plan
Communication with Management and TCWG including communication of audit plan
Format of external confirmations pertaining to:
Property, plant and equipment with third parties
Investments- details of holdings, terms, net asset value, etc.
Trade receivables
Advances (including capital advances)
Inventory with third parties
Security deposits
Lease terms
Cash balances
Bank balances (including deposits)
Borrowings
Trade payables
Terms of contracts
Legal and compliance
Related Parties
Management representation letter (standalone and consolidated)
Communication with those charged with governance (TCWG) - Audit conclusion and reporting
Audit reports, including reporting on Internal Controls over Financial Reporting (IFCoFR) and Companies (Auditor’s Report) Order (‘CARO’) 2020 (standalone and consolidated)
Minutes of discussion with the joint auditors - during the execution of the audit - significant matters
Referral instructions to component auditors
Note -the above lists are not exhaustive and only illustrative.
7. Can I collate the audit observations and recommendations to the client in a template?
All the audit observations and recommendations need to be manually collated from the respective testing working papers in ADAT. In the current version of ADAT, this feature is not available. This is planned to be included in the next version of ADAT.
8. Is practice management integrated with ADAT?
No, practice management is not integrated within ADAT. We will evaluate the plan to integrate practice management with ADAT only post March 2024.
9. Who all will have access to the audit file?
Only Partner or Engagement Manager of the audit engagement can add users to the audit file in ADAT. Only the users assigned by the Partner or Engagement Manager of the audit engagement to the respective audit file in the ADAT will have access to the respective engagement file depending on the roles and restrictions assigned. The audit firm can also provide “view only” rights to the users added to the audit file.
10. Will True and Fair have access to the audit file?
The True and Fair will not have any access to the audit files. As mentioned earlier, only the users assigned by the Partner or Engagement Manager of the audit engagement to the respective audit file in the ADAT will have access to the respective engagement file.
True and Fair will seek prior consent of the Audit Firm to access the metadata in an audit file without identification of the client or the audit engagement in order to develop AI programmes and solutions based on the historical experiences in the audit in such engagements.
11. Can ADAT integrate with the accounting application of the client?
In the current version of ADAT, this feature is not available. We will evaluate this in the next version of ADAT in a phased manner.
12. What if I run into a problem when using ADAT?
True and Fair will have a dedicated support team to help the users navigate through the problems encountered by them on the technical aspect. Users will also have access to training videos on how to use ADAT.
13. Can I transfer audit files which are in the currently in use in other audit documentation tools into ADAT and vice-versa?
No. Users will not be able to transfer the audit files from ADAT to other documentation tools and vice-versa. For transferring the data out of ADAT, True & Fair will provide support to take the print of the documentation or will extract the files in the form of non-editable PDF / word / excel and share it with the users.
In the scenario of transferring the data into ADAT from other documentation tool, User will have to create the documentation from scratch into ADAT. Any copy paste feature available in the earlier audit tool may be used to update the data into ADAT.
14. What is your expectation of the thinking of the regulators regarding ADAT?
ADAT is developed keeping in the mind all the relevant auditing standards. If ADAT is used in the true spirit and if the procedures are followed as suggested in the tool, the audit is expected to comply with regulators expectation, unless there are any professional judgements that are involved.
True and Fair also intends to share the ADAT tool with the regulators to get their views and feedback to ensure there is no disconnect in terms of procedures to be followed in an audit engagement.
15. What training would be provided to the Audit Firms to use ADAT?
ADAT comes with a detailed written instruction manual. True and Fair will continue to make instruction videos and update the library.
16. Can ADAT generate Schedule III financial statements?
No. ADAT is not an accounting compilation software. It is an audit automation tool. Hence preparation of Financial Statements is not in our scope for the current phase. However, the Trial balance is linked to the Financial Statements line items in Schedule III.
17. Can I work offline on ADAT?
Yes. However, there would be periodic synchronisation required with the online audit engagement file.
18. What software licenses do I need to have to use ADAT?
Users will need to have Microsoft (Office) 365 licenses.
19. Which are the browsers in which ADAT works?
Microsoft Edge, Chrome, Safari, Firefox.