Skip to content

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

While auditing Sahyadri Pharma Ltd., the auditor concludes that a qualified opinion is needed because the notes omit the disclosure of directors' remuneration required by the applicable framework. The directors' remuneration matter is not included or addressed in the annual report's other information and does not affect any part of it. Under SA 720 (Revised), what is the correct conclusion about the statement on other information?

A qualified opinion for non-disclosure of directors' remuneration may have no implications for the other information statement, because the matter is not included in or affecting the other information. The auditor still considers the implications but need not automatically report a misstatement.

  1. AThe qualification necessarily means the auditor must state that other information is materially misstated
  2. BThe auditor must disclaim an opinion on the financial statements as well
  3. CThe qualified opinion may have no implications for the statement required under SA 720, since the matter is not in or affecting the other informationCorrect
  4. DThe auditor must withdraw from the engagement because other information exists

Explanation

SA 720 (Revised) notes that a qualified opinion because of non-disclosure of directors' remuneration may have no implications for the other information statement if the matter is not addressed in, and does not affect, the other information. The auditor still considers the implications, but here the conclusion may be none, so automatic misstatement reporting is wrong.

Did you get it right without looking?

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

Practise ReportingFree diagnostic mock

More Reporting questions