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CA Final · Advanced Auditing, Assurance and Professional Ethics · Reporting

In the audit of Narmada Cements Ltd., the auditor's report includes legal reporting items on the same topics already covered in the Key Audit Matters and basis sections required by SAs, and the auditor wants to present both in one section. What does SA 700 (Revised) require?

Presenting them in the same section is allowed when the topics are the same, but the auditor's report must clearly differentiate the other reporting responsibilities from the reporting required by the SAs, so readers can tell the two apart.

  1. AMerging is prohibited in all circumstances
  2. BThe legal items may be in the same section, but the auditor's report must clearly differentiate them from the reporting required by the SAsCorrect
  3. CThe legal items may be merged without any differentiation to save space
  4. DThe legal items must be moved to the management representation letter

Explanation

Where other reporting responsibilities address the same topics as SA-required elements, they may be presented in the same section. If so, the report must clearly differentiate them from the reporting required by the SAs. Merging without differentiation or total prohibition is incorrect.

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