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

The financial statements of Bharat Components Ltd are prepared under the Accounting Standards prescribed under section 133 of the Companies Act, 2013 and also under IFRSs, both being applicable frameworks. The statements comply with the Accounting Standards but fail to comply with IFRSs. What does SA 700 (Revised) indicate about the opinion?

The auditor can give an unmodified opinion on the Accounting Standards framework and a modified opinion on IFRSs under SA 705 (Revised). SA 700 (Revised) requires each applicable framework to be considered separately, so non-compliance with one does not taint the opinion on the other.

  1. AAn unmodified opinion on both frameworks, since one framework is complied with
  2. BA modified opinion on both frameworks, since compliance must be total
  3. CAn unmodified opinion on the Accounting Standards framework and a modified opinion on IFRSs under SA 705 (Revised)Correct
  4. DNo opinion at all, as the auditor must disclaim

Explanation

Each framework is considered separately. Where the statements comply with one framework but not the other, an unmodified opinion can be given on the compliant framework and a modified opinion on the other in accordance with SA 705 (Revised).

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