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

Himalaya Infra Ltd, an Indian company, prepares one set of financial statements stated to comply with both the Accounting Standards prescribed under section 133 of the Companies Act, 2013 and with IFRSs. The auditor finds the statements comply with the Accounting Standards but fail to comply with IFRSs. How should the auditor report under SA 700 (Revised)?

The auditor gives an unmodified opinion that the statements are prepared in accordance with the Accounting Standards under section 133, and a modified opinion under SA 705 (Revised) for IFRSs. Each applicable framework is considered separately when forming the opinion.

  1. AIssue an adverse opinion on the whole set because one framework is breached
  2. BGive an unmodified opinion on compliance with the Accounting Standards and a modified opinion in accordance with SA 705 (Revised) regarding IFRSsCorrect
  3. CGive an unmodified opinion on both frameworks since the Accounting Standards are the statutory framework
  4. DDisclaim an opinion on both frameworks because the frameworks conflict

Explanation

Where two frameworks apply, each is considered separately. If the statements comply with one but not the other, an unmodified opinion can be given on the compliant framework and a modified opinion under SA 705 (Revised) on the other. An adverse opinion on everything or an unmodified opinion on both ignores the separate treatment.

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