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

Iyer & Associates audits Ganga Steels Ltd. Besides the opinion on the financial statements, the auditor must also report on matters required by law, such as whether proper books were kept. The firm proposes to place these in the auditor's report. Which presentation complies with SA 700 (Revised)?

The auditor should address additional legal reporting responsibilities in a separate section titled 'Report on Other Legal and Regulatory Requirements' or otherwise suited to its content. Combining is allowed only when the topics match SA-required elements, and then the two must be clearly differentiated.

  1. APlace them in a separate section titled 'Report on Other Legal and Regulatory Requirements' or a heading suited to the content, unless they address the same topics as the SA-required elementsCorrect
  2. BOmit them from the report and communicate them only orally to the board
  3. CEmbed them in the Basis for Opinion section without any differentiation
  4. DPlace them before the opinion section so that they are prominent

Explanation

Other reporting responsibilities beyond the SAs must be addressed in a separate section headed 'Report on Other Legal and Regulatory Requirements' or another appropriate title. Only where they address the same topics as SA-required elements may they sit in the same section, and then they must be clearly differentiated. Embedding without differentiation is non-compliant.

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