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CMA Intermediate · Corporate Accounting and Auditing · Brief Introduction to Auditing Standards

SA 200 notes that some laws may require the auditor to give opinions on other specific matters in addition to the financial statements. Which statement is correct as per the text?

Under section 143(3)(i) of the Companies Act 2013 the auditor must also report on the adequacy and operating effectiveness of internal financial controls. Because the SAs deal with this only so far as relevant to the financial statements opinion, further audit work is required.

  1. AThe SAs fully cover the additional work, so no further work is needed for such opinions
  2. BUnder section 143(3)(i) of the Companies Act 2013, the auditor must also report on the adequacy and operating effectiveness of internal financial controlsCorrect
  3. CThe effectiveness of internal control is reported only by management, never by the auditor
  4. DSuch additional opinions replace the opinion on the financial statements

Explanation

The text says SAs address such matters only to the extent relevant to forming an opinion on the financial statements, so further work is needed for additional opinions. It cites section 143(3)(i) requiring a report on adequacy and operating effectiveness of internal financial controls. The opinion on the financial statements is not replaced.

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