Audit Adjustment Tracker: Passed, Unpassed and Management Representation File
Audit adjustments should not live in email threads. Finance needs one tracker showing what was posted, what was not posted, why and how financial statements changed.
Use the Tax Audit Applicability Checker — Section 44AB / Section 63 to apply these points to your figures or facts.
Detailed analysis
Audit adjustments affect financial statement reliability, management representation and future-period clean-up. A proper tracker shows the adjustment, amount, line item, status, owner and final decision.
Practical example
Auditor proposes ₹9 lakh provision for old receivables. Management posts ₹6 lakh and leaves ₹3 lakh unadjusted as immaterial with rationale. Tracker records auditor proposal, management decision, FS impact and representation letter linkage.
Evidence and control checklist
| Area | What to check | Evidence to save |
|---|---|---|
| Adjustment details | Nature, amount, account and period. | Auditor query and proposed entry. |
| Status | Passed, unpassed, waived or under discussion. | Adjustment tracker. |
| Materiality impact | P&L/BS/tax and disclosure impact. | Impact analysis and management note. |
| Posting evidence | Journal entry and revised schedules. | JE number and updated FS schedule. |
| Representation | Management conclusion on unpassed items. | Management representation support. |
For the connected rule, example or next step, see Provisions and Contingent Liabilities: AS 29 Year-End File.
Common mistakes
- Tracking audit adjustments only in email.
- Posting entries without updating schedules.
- No rationale for unpassed items.
- Changing FS after audit version lock.
- No tracker owner.
Official reference framework
Based only on official India Code, MCA and ICAI source pages listed below. Check the latest Companies Act, Schedule III, accounting standards, Ind AS/AS applicability and auditor guidance before closing or filing.
Official sources used
This article is intentionally source-limited to official India Code, MCA and ICAI material. Source validation date: 17 June 2026. Verify final positions with latest Companies Act, Schedule III, accounting standards, Ind AS/AS applicability and auditor guidance before closing or filing.
- ICAI: Engagement and Quality Control Standards - Complete Text
- ICAI: Checklist on Standards on Auditing
- India Code: Companies Act, 2013 Section 129 - Financial statement
- India Code: Schedule III to the Companies Act, 2013
FAQs
A log of auditor-proposed and management-posted/unposted adjustments.
Adjustment not recorded in books, often because management assesses it as immaterial or disagrees.
Yes. Rationale and impact should be recorded.
FS schedules change after adjustments.
Controller/audit coordinator.
Source and review trail
Use the current official instrument, portal or regulator publication before acting. This panel separates the category authority from page-specific references.
- Primary category
- Business Case Studies & Corporate Strategy
- Official starting point
- www.mca.gov.in