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CA Final · Advanced Auditing, Assurance and Professional Ethics · Review of Financial Information

Iyer & Co. were appointed to review the financial statements of Deccan Power Ltd for a specific period and are prohibited by the terms of appointment from withdrawing before the review is complete. Management imposes a scope limitation. What may the practitioner consider doing in the report?

The practitioner may include an Other Matter paragraph in the report explaining why withdrawal is not possible, because the appointment for a specific period prohibits withdrawing before completion of the review.

  1. AWithdraw regardless of the prohibition
  2. BInclude an Other Matter paragraph explaining why it is not possible to withdraw from the engagementCorrect
  3. COmit any reference to the limitation
  4. DIssue an unmodified conclusion to avoid conflict

Explanation

Withdrawal may be impossible where the practitioner is appointed for a specific period and is prohibited from withdrawing. The standard states the practitioner may consider it necessary to include an Other Matter paragraph explaining why withdrawal is not possible. Ignoring the limitation or giving an unmodified conclusion would be unsupported.

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