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CMA Intermediate · Corporate Accounting and Auditing · Application of Technology in Audit and Audit Trail

Where should the statutory auditor of a company report on whether the accounting software used by the company had a working audit trail feature throughout the year?

The auditor reports it in the 'Report on Other Legal and Regulatory Requirements', as one of the matters required by Rule 11 of the Companies (Audit and Auditors) Rules, 2014. It is a statutory reporting item, not a basis-for-opinion, key audit matter or emphasis-of-matter item.

  1. AIn the Report on Other Legal and Regulatory Requirements, as a matter under Rule 11 of the Companies (Audit and Auditors) Rules, 2014Correct
  2. BIn the Basis for Opinion paragraph of the report on the standalone financial statements
  3. CIn the Key Audit Matters section, only if the company is unlisted
  4. DIn the Emphasis of Matter paragraph, regardless of the finding

Explanation

Audit trail reporting is a matter specified under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, and is therefore reported in the section on other legal and regulatory requirements, not in the opinion basis or KAM. Emphasis of Matter is for matters already properly disclosed in the financial statements.

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