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

In the audit report of Yamuna Cement Ltd., the auditor presents certain legal reporting responsibilities in the same section as the related SA-required report elements, because they address the same topics. What does SA 700 (Revised) require in this case?

When legal reporting responsibilities share a section with the related SA-required elements, the auditor's report must clearly differentiate the other responsibilities from the reporting required by the SAs. Combined presentation is allowed only because the topics are the same, and it never replaces the SA elements.

  1. AThe report must clearly differentiate the other reporting responsibilities from the reporting required by the SAsCorrect
  2. BNo differentiation is needed since the topics are identical
  3. CThe legal responsibilities must replace the SA-required elements
  4. DThe legal responsibilities must be moved to an appendix to the financial statements

Explanation

SA 700 (Revised) permits combined presentation where the same topics are addressed, but then the report must clearly differentiate the other reporting responsibilities from the reporting required by the SAs. Replacing the SA elements is not allowed.

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