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

Midway through a review of Prism Retail Ltd, management refuses to let the practitioner access key records after the practitioner has substantially completed the review. Withdrawal is possible. Which approach is consistent with SRE 2400 (Revised)?

Where management imposes a scope limitation after the review is substantially complete, the practitioner may decide to complete the review to the extent possible, disclaim a conclusion and explain the limitation in the report paragraph describing the basis for disclaiming a conclusion, rather than giving an unmodified conclusion.

  1. AThe practitioner may decide to complete the review to the extent possible, disclaim a conclusion and explain the scope limitation in the basis paragraph of the reportCorrect
  2. BThe practitioner must issue an unmodified conclusion since most work is done
  3. CThe practitioner must report the matter to the Income Tax authorities instead of the report
  4. DThe practitioner must destroy working papers and cease without any report

Explanation

The text says that if the review is substantially completed, the practitioner may decide to complete it to the extent possible, disclaim a conclusion and explain the scope limitation in the paragraph describing the basis for disclaiming a conclusion. An unmodified conclusion would be inappropriate given the management-imposed limitation.

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