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CS Professional · Compliance Management, Audit and Due Diligence · Forming an Opinion and Reporting

Shakti Auto Ltd prepares financial statements under both the Accounting Standards prescribed under section 133 of the Companies Act, 2013 and IFRSs. The auditor finds the statements comply with the Accounting Standards but fail to comply with IFRSs. What is the appropriate reporting?

The auditor gives an unmodified opinion on compliance with the Accounting Standards under section 133 and a modified opinion under SA 705 (Revised) for IFRSs. Each applicable framework is considered separately, so non-compliance with one does not affect the opinion on the other.

  1. AUnmodified opinion on both frameworks, since one compliant framework is enough
  2. BModified opinion on both frameworks, since any failure taints the whole set
  3. CUnmodified opinion for the Accounting Standards framework and a modified opinion under SA 705 (Revised) for IFRSsCorrect
  4. DDisclaimer on the Accounting Standards framework and unmodified opinion on IFRSs

Explanation

SA 700 (Revised) treats each framework separately. If the statements comply with one but not the other, an unmodified opinion can be given on the compliant framework and a modified opinion under SA 705 (Revised) on the other. Modifying both would ignore the separate evaluation.

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