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CA Final · Advanced Auditing, Assurance and Professional Ethics · Professional Ethics & Liabilities of Auditors

Himalaya Pharma Ltd., a company being audited by CA Dev, has been advised by its Board to replace CA Dev. CA Dev is willing to continue but was not reappointed. He sent a statement to the company for circulation among the shareholders. Which action is consistent with the Code of Ethics guidelines on this situation?

CA Dev must file with the Institute a copy of the statement he sent to the company, and the incoming auditor must obtain a copy from the company and consider it before accepting the appointment. The Ethical Standards Board may then seek further information and report to the Council.

  1. ACA Dev must file a copy of that statement with the Institute, and the incoming auditor must obtain and consider it before acceptingCorrect
  2. BCA Dev needs to do nothing further once the company has the statement, and the incoming auditor may accept without referring to it
  3. COnly the incoming auditor files the statement with the Institute, after accepting the appointment
  4. DThe Ethical Standards Board has no role since the auditor was not removed by a regulator

Explanation

Where a willing auditor has not been reappointed, he files with the Institute a copy of the statement sent to the company for circulation, and the incoming auditor must obtain and consider it before accepting. The Ethical Standards Board may then call for further information and report to the Council, so option D is wrong.

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