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CS Professional · Compliance Management, Audit and Due Diligence · Forming an Opinion and Reporting

While auditing the financial statements of Kaveri Textiles Ltd, the auditor is also asked by the board to report on the adequacy of the company's accounting books and records, a matter that goes beyond the opinion on the financial statements. Under SA 700 (Revised), how is such a request best characterised?

Such a request is an additional reporting responsibility supplementary to the auditor's responsibilities under the SAs. SA 700 (Revised) allows the auditor to be asked to report on matters like adequacy of books and records, but this does not replace the opinion on the financial statements.

  1. AAn additional reporting responsibility supplementary to the auditor's responsibilities under the SAsCorrect
  2. BA matter that must be ignored because the SAs prohibit any reporting beyond the financial statements
  3. CA replacement of the auditor's responsibility to opine on the financial statements
  4. DA responsibility that arises only after the auditor issues a modified opinion

Explanation

SA 700 (Revised) recognises that for some entities the auditor may have additional reporting responsibilities that are supplementary to those under the SAs, such as reporting on the adequacy of accounting books and records. It does not forbid them nor do they replace the opinion on the financial statements.

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