Skip to content

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

During a review of Anand Foods Pvt. Ltd., the practitioner recommends adjusting entries to correct certain depreciation errors so that management can finalise its financial statements. The audit committee asks whether this assistance conflicts with the requirement about doubting the reliability of information. What is the correct position under SRE 2400 (Revised)?

Assisting management by recommending adjusting entries required to finalise the financial statements is not what the consideration on doubtful information reliability is aimed at. Such recommendations can arise in the course of a review and do not by themselves require withdrawal or change the engagement into an audit.

  1. AThe doubt about information reliability is not directed at the need that sometimes arises to assist management by recommending adjusting entries required to finalise the financial statementsCorrect
  2. BRecommending adjusting entries automatically means the practitioner must withdraw from the engagement
  3. CRecommending adjusting entries is permitted only if the practitioner has substantially completed the review
  4. DRecommending adjusting entries converts the engagement into an audit engagement

Explanation

The text states that the consideration about doubting availability or reliability of information is not directed at the need that sometimes arises to assist management by recommending adjusting entries to finalise the statements. So such assistance does not itself trigger the problem. The other options invent consequences not found in the text.

Did you get it right without looking?

One question tells you little. A timed set on Review of Financial Information shows your real accuracy, how long you take and where you lose marks.

Practise Review of Financial InformationFree diagnostic mock

More Review of Financial Information questions