Skip to content

CS Executive · Company Law and Practice · Accounts and Auditors

While auditing Nilgiri Foods Ltd, the auditor finds that he could not obtain some information he considered necessary for the audit. Under Section 143(3)(a) and 143(4), what must the report state?

The report must state whether all necessary information and explanations were obtained, and if not, give the details and their effect on the financial statements. Because the answer is negative, Section 143(4) also requires the reasons to be stated in the report.

  1. ANothing, as missing information is a management matter
  2. BOnly that the audit was completed with the information given
  3. CWhether all necessary information was obtained, and if not, the details and the effect on the financial statements, with reasons for the negative answerCorrect
  4. DOnly a recommendation to the Board to supply the information

Explanation

Section 143(3)(a) requires the report to state whether all necessary information and explanations were sought and obtained and, if not, the details and the effect on the financial statements. Section 143(4) adds that where any required matter is answered in the negative or with a qualification, the reasons must be stated.

Did you get it right without looking?

One question tells you little. A timed set on Accounts and Auditors shows your real accuracy, how long you take and where you lose marks.

Practise Accounts and AuditorsFree diagnostic mock

More Accounts and Auditors questions