CA Final · Advanced Auditing, Assurance and Professional Ethics · Reporting
While auditing Sundaram Pharma Ltd, the auditor issues a qualified opinion because directors' remuneration was not disclosed as the applicable framework requires. The annual report's other information (Chairman's message, MD&A) does not mention directors' remuneration and nothing in it is affected by this matter. Under SA 720 (Revised), what is the correct conclusion about the auditor's reporting on other information?
A qualified opinion for non-disclosure of directors' remuneration may have no implication for the other information statement under paragraph 22(e), because the matter is not included or addressed in the other information and does not affect any part of it. The auditor still considers it but need not change that reporting.
- AThe qualification may have no implications for the statement required under paragraph 22(e), since the matter is not included or addressed in the other information and affects no part of itCorrect
- BThe auditor must automatically state that the other information is materially misstated
- CThe auditor must withdraw from the engagement because a qualified opinion bars reporting on other information
- DThe auditor must convert the qualified opinion into a disclaimer of opinion
Explanation
SA 720 (Revised) notes that a qualified or adverse opinion may not affect the paragraph 22(e) statement where the modified matter is not in or addressed by the other information and affects no part of it. Non-disclosure of directors' remuneration is the standard's own example. The auditor still considers implications, but here there are none.
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