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CMA Final · Cost and Management Audit · Cost Auditing and Assurance Standards

Under SCA 103, when a cost auditor cannot obtain reasonable assurance about the cost statements, what is the course of action indicated for the audit opinion?

The cost auditor should qualify the opinion and, only in extreme cases, disclaim an opinion. This is because reasonable assurance could not be obtained, so an unmodified opinion would mislead users of the cost statements.

  1. AQualify the opinion and, in extreme cases, disclaim an opinionCorrect
  2. BIssue an unmodified opinion with an emphasis note
  3. CWithdraw the cost statements from the management
  4. DRely on management representations to complete the evidence

Explanation

SCA 103 states that where reasonable assurance cannot be obtained, the cost auditor should qualify the opinion and in extreme cases disclaim an opinion. An unmodified opinion would not reflect the lack of assurance. Management representations cannot substitute for audit evidence.

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