Audit Scenario Library

The engagement scenario library provides fifteen deterministic synthetic engagement walkthroughs that exercise the audit FSM end to end. Each scenario fixes a starting position, a procedure execution path, and the expected outcome — opinion type, key audit matters, opinion modifications, and any reporting overrides — so testing harnesses can validate that audit-software changes preserve the ISA-prescribed flow without manual re-walking. The set spans clean engagements (unqualified opinion with no findings), qualified opinions arising from material misstatement, going-concern scenarios both appropriate and inappropriate, scope limitations, related-party transaction findings, subsequent-events disclosures, IFRS first-time adoption, IFRS 8 segment-reporting complexity, IAS 28 significant-influence loss, and not-for-profit / governmental engagements with their distinct reporting frameworks. Use this family as a regression battery when changing methodology execution code, as worked examples when training auditors on ISA-conforming engagement flow, or as scenarios to seed synthetic data generation runs.

Clean parent + 3 components engagement

Standard 3-component group audit; all components clean, no RPT issues, no going-concern concerns, no scope limitations, aggregate misstatement well below performance materiality.

Qualified opinion: material revenue cut-off misstatement at C1

C1 (significant component) has uncorrected revenue cut-off misstatement aggregating to ~$1.6M; below performance materiality individually but SAD aggregation crosses the performance threshold.

Material uncertainty about going concern (C2 covenant breach)

C2 has Q3 covenant breach + 2-year recurring loss pattern. Mitigating factors disclosed but material uncertainty remains. Group conclusion is MATERIAL_UNCERTAINTY → EOM paragraph.

Adverse opinion: going-concern basis inappropriate (parent liquidation)

Parent in formal liquidation proceedings; going-concern basis of preparation is inappropriate. Adverse opinion under ISA 570.

Undisclosed RPT identified at C1

C1 has a material RPT with controlling shareholder that is not disclosed in the financial statements. ISA 550 finding.

Scope limitation at significant component C2

Group auditor cannot obtain sufficient appropriate audit evidence regarding C2 (component auditor access denied). ISA 600 → disclaimer of opinion.

Subsequent event Type 1: customer bankruptcy provides AR adjustment

Major customer files for bankruptcy after balance-sheet date providing evidence of AR collectibility issues that existed at year-end. ISA 560 Type-1 adjusting event.

Subsequent event Type 2: post-period-end fire requires disclosure

Major manufacturing facility fire after balance-sheet date. ISA 560 Type-2 event — material loss but doesn't relate to conditions at year-end → disclosure only.

Equity-method investee impairment (C5_eq)

Equity-method investee C5_eq shows objective evidence of impairment under IAS 28 / IAS 36. Recoverable amount < carrying. Impairment loss recognised.

Engagement blocked at acceptance: network-firm conflict

Network-firm independence conflict identified at acceptance (significant non-audit service to a non-audit affiliate). IESBA / ISA 220 acceptance gate fails.

NFP single-entity audit with donor-fund accountability

Not-for-profit single-entity audit with restricted vs unrestricted donor funds. Expense-driven materiality (revenue benchmark inappropriate); EOM paragraph for fund-accounting disclosure.

Governmental audit under ISA 200 + ISSAI 100/200/300/400

Governmental audit under ISA 200 with ISSAI 100/200/300/400 considerations (compliance + performance + financial dimensions). No issues, but ISSAI-aligned reporting.

IFRS 1 first-time adoption (transition from local GAAP)

Entity transitions from local GAAP to IFRS under IFRS 1. Reconciliation disclosures are heavy; EOM paragraph for transition-disclosure quality.

Listed entity with complex IFRS 8 segment-aggregation judgment

Listed entity has 7 operating segments aggregated into 3 reportable segments under IFRS 8. Aggregation judgment is KAM consideration.

IAS 28 § 22 reclassification at loss of significant influence

Investor's equity-method investee dilutes its stake below the significant-influence threshold (20 %). IAS 28 § 22 requires reclassification with fair-value remeasurement; one-off P&L impact.