Skip to content

CS Professional · Compliance Management, Audit and Due Diligence · Forming an Opinion and Reporting

An auditor reports on a company incorporated in India. Which wording best identifies the applicable financial reporting framework in the opinion, as described in SA 700 (Revised), when the framework includes both standards and legal requirements?

The framework is identified as 'in accordance with the Accounting Standards prescribed under section 133 of the Companies Act, 2013'. This wording suits a framework combining standards with legal requirements, and it tells users the context of the opinion without limiting the auditor's evaluation.

  1. AIn accordance with the Accounting Standards prescribed under section 133 of the Companies Act, 2013Correct
  2. BIn accordance with the auditor's own judgment of fair presentation
  3. CIn accordance with the company's internal accounting manual
  4. DIn accordance with the generally accepted practices of the industry

Explanation

SA 700 (Revised) gives examples such as 'in accordance with the Accounting Standards prescribed under section 133 of the Companies Act, 2013' where the framework covers standards plus legal or regulatory requirements. The other options do not name a recognised financial reporting framework. The identification only gives users context and does not limit the auditor's evaluation.

Did you get it right without looking?

One question tells you little. A timed set on Forming an Opinion and Reporting shows your real accuracy, how long you take and where you lose marks.

Practise Forming an Opinion and ReportingFree diagnostic mock

More Forming an Opinion and Reporting questions