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CA Final · Advanced Auditing, Assurance and Professional Ethics · Review of Financial Information

CA Sunita is appointed by law to review the financial statements of a state public sector entity for a specified period. Management imposes a scope limitation, but the law prohibits her from withdrawing before the review is completed. What is the appropriate step under SRE 2400 (Revised)?

Sunita should continue the engagement because law prevents withdrawal, and may consider adding an Other Matter paragraph in her report explaining why she could not withdraw. SRE 2400 (Revised) specifically recognises public sector and fixed-period appointments as situations where withdrawal is not possible.

  1. AWithdraw anyway, since professional standards override law
  2. BContinue and consider including an Other Matter paragraph in the report explaining why withdrawal is not possibleCorrect
  3. CIssue an unmodified conclusion to avoid conflict with the law
  4. DResign from the profession

Explanation

The standard recognises that withdrawal may not be possible where law requires continuation, such as for a public sector entity or a fixed-period appointment. The practitioner may consider including an Other Matter paragraph explaining why withdrawal is not possible. Option A is wrong as law prevails here.

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