CA Inter P5 · Chapter 8 · Question 10 of 13
After accepting the engagement, the management of Tara Pumps Ltd. imposes a limitation on the scope of the audit that the auditor believes is likely to result in a disclaimer of opinion. Under SA 705, the auditor shall FIRST:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Request management to remove the limitation
Explanation
SA 705 requires that if management imposes a limitation after acceptance that is likely to result in a qualified opinion or disclaimer, the auditor shall request management to remove it. If management refuses, the auditor communicates with those charged with governance, determines whether alternative procedures are possible and, if pervasive effects remain, withdraws where practicable and legally permitted or disclaims an opinion.
More Audit Report MCQs
- Q12Which of the following matters is required to be reported by the auditor under CARO?
- Q13Which of the following is reported by the auditor of a company under section 143(3) of the Companies Act, 2013, rather than under CARO?
- Q1Under SA 700, the auditor expresses an unmodified opinion when:
- Q2Under SA 700, which section of the auditor's report must immediately follow the Opinion section?
- Q3SA 701 on communicating Key Audit Matters applies to audits of complete sets of general purpose financial statements of: