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CA Final · Advanced Auditing, Assurance and Professional Ethics · Reporting

Vihaan & Co. audits Kaveri Textiles Ltd. The company prepared one set of financial statements under Ind AS for Indian statutory purposes and another set under IFRS for its foreign parent. Both frameworks are acceptable general purpose frameworks, and the auditor has been engaged to report on both sets and has issued a report on the IFRS set. Which action is consistent with SA 706 (Revised) in the report on the Ind AS statements?

The auditor may add an Other Matter paragraph saying the entity has prepared another set of financial statements under a different general purpose framework and that a report has been issued on it. Two acceptable sets do not justify a qualification or disclaimer.

  1. AInclude an Other Matter paragraph stating that another set of financial statements has been prepared under another general purpose framework and that the auditor has reported on itCorrect
  2. BInclude a Key Audit Matter on the IFRS set in place of any other paragraph
  3. CQualify the opinion because two sets of financial statements exist
  4. DIssue a disclaimer of opinion on the Ind AS statements until the IFRS report is released

Explanation

Where an entity prepares two sets of statements under different acceptable general purpose frameworks and the auditor reports on both, the auditor may include an Other Matter paragraph referring to that fact. Existence of two sets is not a ground for qualification or disclaimer, so the qualification option is wrong.

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