Falcon Creek Resources Inc.

The issuer migrated to a new ERP on October 15, 2025. No ITGC walkthrough or change-management documentation has been uploaded for the post-cutover environment. CAS 315 (Revised) requires the auditor to understand IT general controls relevant to financial reporting; without documentation, the auditor cannot rely on automated controls and must expand substantive procedures across Q3 and Q4.

"Walk us through the design and operating effectiveness of access, change management, and computer operations over the new ERP. What controls migrated and which are new?"

Engage the IT lead to produce a CAS 315-compliant walkthrough memo covering access provisioning, change management, and batch monitoring for the new ERP. Provide segregation-of-duties matrix and screenshots of the access review for the period October 15, 2025 to fiscal year-end.

The prior-year CAS 265 letter identified (a) absence of formal journal-entry review and approval, and (b) inadequate review of management estimates by the audit committee. Auditus.ai cannot find current-year remediation evidence for either. CAS 265 requires re-evaluation; absent remediation evidence, both will roll forward and likely escalate.

"What did management do this year to address the two prior-year significant deficiencies? Show the remediation evidence and operating-effectiveness testing."

Upload (a) the journal-entry review log signed by the Controller for the year, and (b) the audit committee minutes evidencing review of management's significant estimates each quarter. Map each piece of evidence to the prior-year finding.

Three new bank accounts were opened in Q3 (per GL chart-of-accounts diff). No bank confirmation has been initiated for these accounts. CAS 505 requires confirmations for material balances; without responses by report date, the auditor cannot conclude on existence.

"Are bank confirmations out for every account open during the year? When were they sent and what is the response status?"

Initiate bank confirmation requests immediately for the three new accounts. Track responses in the audit PBC tracker.

The West Ridge CGU has a discounted-cash-flow recoverable-amount model, but the file contains no sensitivity analysis on the discount rate, commodity price assumption, or terminal growth. CAS 540 (Revised) requires the auditor to evaluate management's response to estimation uncertainty; IAS 36 requires sensitivity disclosure where a reasonably possible change would eliminate headroom.

"What is the headroom in the West Ridge model, and at what discount rate or commodity price does the headroom disappear?"

Add a sensitivity table flexing the discount rate (±200bps), commodity price (±15%), and terminal growth (±100bps). Where any reasonably possible change eliminates headroom, draft the IAS 36 sensitivity disclosure for the financial statements.

Two new customer contracts (CON-2025-118, CON-2025-127) are reflected in revenue but no IFRS 15 application memo has been uploaded. Revenue is a presumed fraud risk under CAS 240; without memos, the auditor will treat both contracts as significant risks requiring expanded procedures.

"Walk us through performance obligations, transaction price, and recognition pattern for the two new contracts."

Prepare IFRS 15 application memos covering the five-step model for both contracts. Include the variable consideration constraint analysis and principal-vs-agent conclusion.

Auditus.ai diff'd the MD&A draft against the trial balance: net loss ($14.2M vs. $14.5M), G&A expense ($8.1M vs. $7.9M), and exploration costs ($21.4M vs. $21.8M) do not match. Under CAS 720, the auditor must read the MD&A and report inconsistencies before signing.

"These three numbers don't tie. Which is right, and what's the rest of the document doing?"

Update the MD&A draft to match the final audited figures. Re-run the diff after refresh to confirm zero inconsistencies before circulating to the audit committee.

The going-concern memo contains a base-case 12-month cash forecast but no stress scenarios. For a junior exploration issuer, lenders and the auditor will both expect scenarios for delayed financing, lower realized prices, and capex slippage.

"What happens to the cash runway under a financing delay or 20% commodity price drop?"

Add three scenarios: financing-delay (3 months), price-down (-20%), and capex-overrun (+15%). Calibrate the IAS 1 going-concern disclosure language based on the worst-case runway.

Auditus.ai cannot find a current-year engagement letter signed by both the issuer and the audit firm. CAS 210 requires agreement on the terms of the engagement annually.

"Where is this year's signed engagement letter?"

Request the current-year engagement letter from the audit firm and execute it before fieldwork starts.

Two new property leases entered in Q2 use the FY2024 incremental borrowing rate. Rates have moved materially; IBR should be re-evaluated at lease commencement.

"Is the IBR appropriate as of the lease commencement date for each new lease?"

Refresh the IBR analysis as of each new lease's commencement date. Recompute the ROU asset and lease liability balances and post any adjustments.

The related-party list (last updated FY2025) has not been reconciled to the current-year GL counter-party list. CAS 550 requires identification of related-party relationships and transactions. MI 61-101 adds disclosure requirements for material transactions.

"How did you confirm the related-party list is complete for the current year?"

Diff the GL counter-party list against the related-party list and the board's directors' / officers' declarations. Investigate any name match or related-individual link.

Subsequent-events procedures should be performed close to the report date. The plan has them running 18 days before. If the report date slips, procedures must be re-performed.

"When were subsequent-event procedures performed relative to the report date?"

Re-schedule subsequent-events procedures to within 3 business days of the planned report date and build a contingency check-in for any slip.

Auditor invoices include $42,000 of tax advisory work in Q4. The audit committee pre-approval matrix shows the policy but not the specific approval for this engagement. NI 52-110 requires pre-approval; Rule 204 makes unapproved non-audit services an independence threat.

"Where is the audit committee's pre-approval of the tax advisory services?"

Obtain audit committee ratification at the next meeting; revise the pre-approval policy to require advance approval for any new non-audit service above $10,000.

Inventory balance ($3.4M) exceeds materiality. No count plan or scheduled attendance date has been confirmed with the auditor. CAS 501 presumes auditor attendance at the count.

"When and where is the year-end inventory count, and how can we attend?"

Confirm count date, location, procedures, and auditor attendance arrangements at least 14 days before count.

Legal letter requests should be in counsel's hands well before the report date to allow time for responses. Auditus.ai cannot find evidence the request has been sent.

"When did you send the legal letter, and have you received responses from all counsel?"

Send the legal letter request to all retained counsel within 5 business days.

The payroll provider's most recent SOC 1 Type 2 covers October 2024 — September 2025. The issuer's fiscal year is April 2025 — March 2026. A bridge letter is needed for October 2025 — March 2026.

"Do you have a SOC 1 bridge letter covering the gap?"

Request a bridge letter from the payroll provider's auditor covering October 2025 — March 2026.