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

CA Vikram was appointed to review the financial statements of Deccan Infra Ltd. After he had substantially completed the review, management refused him access to key board minutes, imposing a scope limitation. Which action is consistent with SRE 2400 (Revised)?

Because the review is substantially complete, Vikram may complete it to the extent possible, disclaim a conclusion, and explain the management-imposed scope limitation in the paragraph describing the basis for disclaiming a conclusion. Immediate withdrawal is not mandatory, and an unmodified conclusion would be inappropriate.

  1. AHe must withdraw immediately regardless of the stage of completion and issue no communication
  2. BHe may decide to complete the review to the extent possible, disclaim a conclusion and explain the scope limitation in the basis for disclaiming a conclusion paragraphCorrect
  3. CHe should issue an unmodified conclusion because the work is almost complete
  4. DHe should substitute an audit opinion for the review conclusion

Explanation

The standard notes that practicality of withdrawal depends on the stage of completion. If the review is substantially completed, the practitioner may complete it as far as possible, disclaim a conclusion and explain the limitation in the basis paragraph. Option A ignores the stage-of-completion factor, and option C ignores the limitation.

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