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

While auditing Narmada Pharma Ltd., the auditor concludes that the directors' remuneration disclosure required by the framework has been omitted from the financial statements, and issues a qualified opinion. The annual report's other information does not mention directors' remuneration and nothing else in it is affected by this omission. How should the auditor approach the statement required under SA 720 (Revised) about other information?

The auditor must consider the implications of the qualification, but because the omitted remuneration disclosure is not addressed in the other information and does not affect it, the qualification may have no impact on the other information statement. No automatic misstatement conclusion is required.

AThe auditor must automatically state that the other information is materially misstated
BThe auditor must convert the opinion into a disclaimer
CThe auditor must consider the implications, and here the qualification may have no impact on that statement because the matter is not included in or does not affect the other informationCorrect
DThe auditor must omit the Other Information section from the report entirely

Explanation

SA 720 (Revised) requires the auditor to consider the implications of the qualification for the statement on other information. It notes that a qualification for non-disclosure of directors' remuneration may have no implications if the matter is not in the other information and affects none of it. Automatic misstatement is wrong since nothing in the other information is affected.

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