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

CS Rohan, auditing Narmada Foods Ltd, has concluded that sufficient appropriate evidence is obtained and that uncorrected misstatements are immaterial. Before forming his opinion, he still checks whether the financial statements adequately refer to or describe the applicable financial reporting framework. Is this step required under SA 700 (Revised)?

Yes. SA 700 (Revised) requires the auditor to evaluate whether the financial statements adequately refer to or describe the applicable financial reporting framework. This is a separate required evaluation, in addition to conclusions on evidence and misstatements, and applies regardless of whether the entity is listed.

  1. ANo, because once evidence is sufficient no further evaluation is needed
  2. BYes, the auditor shall evaluate whether the financial statements adequately refer to or describe the applicable financial reporting frameworkCorrect
  3. CNo, this is the responsibility of the audit committee only
  4. DYes, but only when the entity is listed

Explanation

Paragraph 15 requires the auditor to evaluate whether the financial statements adequately refer to or describe the applicable framework. It is one of the evaluations in paragraphs 12-15 that the conclusion must take into account, in addition to evidence and misstatements, and is not limited to listed entities.

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