EAST DELHI CPE STUDY CIRCLE
OF NIRC OF
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA,
TUESDAY , APRIL 28, 2015
AUDITORS’ REPORT &CARO
-IMPACTS
OF COMPANIES ACT 2013
CA GOPAL JI AGRAWAL
B.COM FCA LLB DISA IFRS (ICAI)
For any query, discussion or suggestion, please mail at
gjafca@gmail.com
AN OPEN SECRET PUZZLE
It is the only final delivery in the
audit process?
It is only mouthpiece of the
Auditors?
It is the only communication
between the auditors and the
stakeholders?
BY- CA GOPAL JI AGRAWAL
AN OPEN SECRET PUZZLE
It is hardly drafted and read by
qualified CA?
It was seldom read by regulators
or stakeholders?
It can ONLY save or sink an
auditor/audit firm?
BY- CA GOPAL JI AGRAWAL
Independent Auditor’s report
No Addressee
Addressed to BOD
Reporting P&L for yr ending > 12 M
AS issued by ICAI
M.No. and firm Regn Number missing
Un-dated
Place of Signature not given
Branch Audit report not dealt with
BY- CA GOPAL JI AGRAWAL
Independent Auditor’s report
Report date prior to FSs date
Membership number with prefix F
Examined the FSs
Report made subject to A/policies
Qualification not in thick/italic
Non-Compliance of several standards
still clean report
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT
(Positive Assertions)
1. We conducted our audit in accordance with SA
specified u/s 143(10) of the Companies Act, 2013?
[HOW MANY]
2. The financial statements are free from material
misstatements??
3. The balance sheet, the statement of profit and loss and
the cash flow statement comply with the Accounting
Standards referred to in sub-section 133 read with Rule
7 of Companies (Accounts) Rules 2014 {to the extent
applicable}. [HOW MANY]
4. We have taken into account of the provisions of the
Companies Act 2013.
5. These financial statements represent a true and fair
view.
BY- CA GOPAL JI AGRAWAL
PARENTS
Standards governing Reporting
1.SA-700 Forming an opinion and
reporting on FSs
2. SA 705 Modifications to the opinion
in
IARs-qualified,
adverse,
disclaimer
3. SA-706 Emphasis of
Matter paragraphs and
Other matter paragraphs
in Independent Auditors’ Report
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
Nature of
matter giving
rise to
modification
Auditor’s
judgment about the
Materiality and Pervasiveness of the
Effects or Possible Effects on the
financial statements
Material but
Not Pervasive
Material and
Pervasive
FS are materially
misstated
Qualified opinion
Adverse opinion
Inability to obtain
sufficient appropriate
audit evidence
Qualified opinion
Disclaimer of opinion
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
Meaning of Material?
Information is material if its omission or
misstatement (individually or collectively)
could influence the economic decisions of
the users taken on the basis of financial
information. Materiality depends on the
size or nature or a combination of both. It is
entity specific.
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
Meaning of misstatement?
A “misstatement” of the financial
statements occurs when there is a
difference between how each of these
aspects is reported by the management
in the financial statements and how it
should be as per the applicable financial
reporting framework.
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
When misstatement is pervasive?
(A)Where it pertains to an amount(s) in the
financial statements, it is not confined to specific
components, accounts or items of the financial
statements. If it is so confined, it represents or could
represent a substantial portion of the financial
statements; or
(B)Where it pertains to disclosures, such disclosures
or the matter(s) therein are/ could be fundamental to
the user’s understanding of the financial statements.
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter
Paragraphs and Other Matter
Paragraphs In IARs
Differentiate between MP & OMP?
Moreover there are following difference:
1. In MP, matters are appropriately presented
and disclosed in FSs but OMP are not
presented or disclosed in FSs.
2. MP is fundamental with reference to
understanding of FSs while OMP is relevant to
users’ understanding in respect of 3 matters
only(a)audit,(b)the auditor’s responsibilities
or (c ) the auditor’s report.”
BY- CA GOPAL JI AGRAWAL
Independent Auditor’s report
Title [IAR]
Addressee [Members]
REPORT ON FINANCIAL STATEMENTS
•Introductory paragraph
•Management’s responsibility paragraph
•Auditor’s responsibility paragraph
• Auditor’s opinion paragraph
• Other responsibilities paragraph

Matter Paragraph

Other Matter Paragraph
REPORT ON OTHER LEGAL & REGULATORY REQUIREMENTS
Signature
Date of the auditor’s report (after approval)
Place of signature
FRN and Membership Number
BY- CA GOPAL JI AGRAWAL
143
VS.
227
BY- CA GOPAL JI AGRAWAL
SECTION 227 VS. 143
227 (1)
143 (1)
Right of access to books of
account -no change
227(1A) (a) to (f)
````
143(1) (a)
to (f)
BY- CA GOPAL JI AGRAWAL
SECTION 143 (1) (a) – (f)
(a) whether loans and advances
made by the company on the
basis of security have been
properly secured and whether
the terms on which they have
been made are prejudicial to
the interests of the company or
its members;
BY- CA GOPAL JI AGRAWAL
SECTION 143 (1) (a) – (f)
(b) whether transactions of the
company which are represented
merely by book entries are
prejudicial to the interests of the
company;
BY- CA GOPAL JI AGRAWAL
SECTION 143 (1) (a) – (f)
(c)Where
the company not being an
investment company or a banking company,
whether so much of the assets of the company
as consist of shares, debentures and other
securities have been sold at a price less than
that at which they were purchased by the
company whether loans and advances made by
the company have been shown as deposits;
BY- CA GOPAL JI AGRAWAL
SECTION 143 (1) (a) – (f)
(d) whether loans and advances made by
the company have been shown
as deposits;
Section 2(31) “deposit” includes any
receipt of money by way of deposit or
loan or in any other form by a company,
but does not include such categories of
amount as may be prescribed in
consultation with the Reserve Bank of
India.
BY- CA GOPAL JI AGRAWAL
SECTION 143 (1) (a) – (f)
(e) whether personal expenses have been
charged to revenue account;
BY- CA GOPAL JI AGRAWAL
SECTION 143 (1) (a) – (f)
(f) where it is stated in the books and documents of
the company that any shares have been allotted for
cash, whether cash has actually been received in
respect of such allotment, and if no cash has actually
been so received, whether the position as stated in
the account books and the balance sheet is correct,
regular and not misleading.
Provided that the auditor of a company which is a
holding company shall also have the right of access to
the records of all its subsidiaries insofar as it relates
to the consolidation of its financial statements [2(40)]
with that of its subsidiaries.
BY- CA GOPAL JI AGRAWAL
SECTION 143 (2) vs. 227(2)
The auditor shall make a report to the
members of the company on the
accounts examined by him and on every
financial statements {balance sheet and
profit and loss account and on every
other document declared by this Act to
be part of or annexed to the balance
sheet or profit and loss account} which
are required by or under this Act to be
laid before the company in general
meeting {during his tenure of office}
BY- CA GOPAL JI AGRAWAL
SECTION 143 (2) vs. 227(2)
and the report shall after taking into account the
provisions of this Act, the accounting and auditing
standards and matters which are required to be
included in the audit report under the provisions
of this Act or any rules made there under or
under any order made under sub-section (11) and
to the best of his information and {and according
to explanations given to him} knowledge, the said
accounts, financial statements give a true and fair
view of the state of the company’s affairs as at the
end of its financial year and profit or loss and cash
flow for the year and such other matters as may
be prescribed.
BY- CA GOPAL JI AGRAWAL
SECTION 143 (3) (a) vs. 227(3) (a)
Whether he has sought and obtained
all the information and explanations
which to the best of his knowledge
and belief were necessary for the
purpose of his audit and if not, the
details thereof and the effect of such
information
on
the
financial
statements
BY- CA GOPAL JI AGRAWAL
SECTION 143 (3) (b) vs. 227(3) (b)
Whether, in his opinion, proper
books of account as required by law
have been kept by the company so
far as appears from his examination
of those books and proper returns
adequate for the purposes of his
audit have been received from
branches not visited by him;
BY- CA GOPAL JI AGRAWAL
SECTION 143 (3) (c) vs. 227(3) (bb)
(c)Whether the report on the accounts
of any branch office of the company
audited under sub-section (8) {Section
228}by a person other than the
company's auditor has been sent to him
{as required by clause (c) of sub section
(3) of that section} of under the proviso
to that sub-section and the manner in
which he has dealt with it in preparing his
report;
BY- CA GOPAL JI AGRAWAL
SECTION 143 (3) (d) vs. 227(3) (c)
Whether the company’s
balance sheet and profit
and loss account dealt with
in the report are in
agreement with the books
of account and returns;
BY- CA GOPAL JI AGRAWAL
SECTION 143 (3) (e) vs. 227(3) (d)
Whether, in his opinion, the
financial statements {P/L
A/c and balance sheet}
comply with the accounting
standards; {referred to in subsection (3C) of section 211}
BY- CA GOPAL JI AGRAWAL
SECTION 143 (3) (f) vs. 227(3) (e)
{in thick type or in italics} the
observations or comments of
the auditors on financial
transactions or matters
which have any adverse effect
on the functioning of the
company; GN- 705, 706
Exp. GC, litigation
BY- CA GOPAL JI AGRAWAL
SECTION 143 (3) (g) vs. 227(3) (f)
whether any director is
disqualified from being
appointed as a director
under {clause (g) of subsection (1) of section 274}
sub-section (2) of section
164;
BY- CA GOPAL JI AGRAWAL
SECTION >> Vs. 227(3) (g)
Whether the cess
payable under section
441A has been paid
and if not the details of
amount of cess not so
paid.
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (3) (h)
Any qualification,
reservation or adverse
remark relating to the
maintenance of accounts
and other matters
connected therewith. GN
Modified Vs. MP or OMP
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (3) (h)
Section 143 (b)- whether proper
books of account as required by
law have been kept by the
company – if modified
Like improper cost records,
inventory records etc.
BY- CA GOPAL JI AGRAWAL
BASIS OF QUALIFIED OPINION
The Company’s inventories are carried in the Balance Sheet at
Rs. XXX (As at 31st March 20YY: Rs. YYY). The Management has
not stated the inventories at the lower of cost and net
realisable value but has stated them solely at cost, which
constitutes a departure from the Accounting Standard - 2
“Valuation of Inventories”. The Company’s records indicate
that had the Management stated the inventories at the lower of
cost and net realisable value, an amount of Rs. XXX (As at 31st
March 20YY: Rs. YYY) would have been required to write the
inventories down to their net realisable value. Accordingly, cost
of sales would have been increased by Rs. XXX (Previous year
ended 31st March, 20YY: Rs.YYY), and income tax, profit for the
year and shareholders’ funds would have been reduced by Rs. X,
Rs. XX and Rs. XXX, respectively (Previous year ended 31st
March, 20YY: Rs.Y, Rs.YY and Rs.YYY, respectively). This matter was
also qualified in our report/ the report of the predecessor
auditors on the financial statements for the year ended 31st
March 20YY.
BY- CA GOPAL JI AGRAWAL
143 (3) (f) & (h) EXP.
INVENTORIES CASE: -QUALIFIED
NPA case study – Adverse, disclaimer
(f) The matter described in the Basis for
Qualified Opinion paragraph above, in our
opinion, may have an adverse effect on the
functioning of the Company.
……………………………
(h) The qualification relating to the
maintenance of accounts and other matters
connected therewith are as stated in the
Basis for Qualified Opinion paragraph above.”
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (3) (i) & (j)
(i) whether the company has
adequate internal financial
controls system in place and
the operating effectiveness of
such controls
(j) such other matters as may
be prescribed
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (3) (i) R-10A
10A. For the purposes of clause (i) of subsection (3) of section 143, for the financial
years commencing on or after 1st April, 2015,
the report of the auditor shall state about
existence of adequate internal financial
controls
system
and
its
operating
effectiveness
Provided that auditor of a company may
voluntarily include the statement referred to
in this rule for the financial year
commencing on or after 1st April, 2014 and
ending on or before 31st March, 2015
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (3) ( j ) –Rule 11
The auditor’s report shall also include
their views and comments:
(a) Whether Co. has disclosed the
impact, if any, of pending litigation
(b) Whether the co. has made provision
as required under any law or AS, for
material foreseeable losses, on LT
contracts including derivatives
(c) Delay in transferring amounts to
IE&PF
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (4) vs. 227(4)
Where any of the matters {referred
in clause (i) and (ii) of sub-section
(2) or in clause (a), (b) , (bb), (c) and
(d) of sub-section (3)} required to
be included in the audit report
under this section is answered in
the negative or with a qualification,
the report shall state the reasons
therefore. (scope enlarged)
BY- CA GOPAL JI AGRAWAL
CLAUSE 143 (5-7) vs. 619 (1-5)
These sub-clauses are related to
Government Companies’ auditors
appointment, reports, special
reports etc. as covered u/s 619
earlier.
Definition changed of Govt.
company (51% paid up vs. owned or
controlled.
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (8) vs. 228(1-4)
Related to Appointment, powers &
duties of Branch auditors.
Central Govt. power to exempt any
branch audit has been abolished.
The office designated as branch has
to be audited.
Rule 12- 143(1 to 4, 12) applicable &
report to company auditor.
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (9)
Every auditor shall comply with the
auditing standards.
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (10)
The Central Government may prescribe the standards of
auditing or any addendum thereto, as recommended by the
Institute of Chartered Accountants of India, constituted
under section 3 of the Chartered Accountants Act, 1949, in
consultation with and after examination of the
recommendations made by the National Financial Reporting
Authority.
Provided that until any auditing standards are notified, any
standard or standards of auditing specified by the Institute of
Chartered Accountants of India shall be deemed to be the
auditing standards.
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (11)
The Central Government may, in
consultation with the National Financial
Reporting Authority, by general or special
order, direct, in respect of such class or
description of companies, as may be
specified in the order, that the auditor’s
report shall also include a statement on
such matters as may be specified
therein.
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (12) FRAUD
Notwithstanding anything contained in this
section, if an auditor of a company, in the
course of the performance of his duties as
auditor, has reason to believe that an offence
involving fraud is being or has been
committed against the company by officers
or employees of the company, he shall
immediately report the matter to the
Central Government within such time and in
such manner as may be prescribed.
Rule 13- 60 days (45+15days) –Secretary
MCA by speed post with e-mail (ADT-4)
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (13) FRAUD
No duty to which an auditor of a
company may be subject to shall
be regarded as having been
contravened by reason of his
reporting the matter referred to
in sub- section (12) if it is done
in good faith.
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (14) FRAUD
The provisions of this section shall
mutatis mutandis apply to:(a)the Cost Accountant in practice
conducting cost audit under section
148; or
(b) the Company Secretary in
practice conducting Secretarial
Audit under section 204.
BY- CA GOPAL JI AGRAWAL
NEW CLAUSE 143 (15) FRAUD
If any auditor, cost accountant or
Company Secretary in practice do
not comply with the provisions of
sub-section (12), he shall be
punishable with fine which shall not
be less than one lakh rupees but
which may extend to twenty five
lakh rupees.
BY- CA GOPAL JI AGRAWAL
RD
3
CONSECUTIVE
YEAR OF CHANGES
IN
IAR
BY- CA GOPAL JI AGRAWAL
REVISED AUDIT REPORT
INDEPENDENT AUDITOR’S REPORT
TO THE ________ OF ABC COMPANY LIMITED
REPORT ON THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial
statements of ABC COMPANY LIMITED (“the company”)
which comprise the Balance Sheet as at 31st March 20XX,
the Statement of Profit and Loss, the Cash Flow
Statement and a summary of the significant accounting
policies and other explanatory information for the year
then ended [in which are incorporated the Returns for the
year ended on that date audited by the branch auditors of
the company’s branches at (location of the branches)].
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INDEPENDENT AUDITOR’S REPORT – Continue ….
Management’s Responsibility for the Standalone
Financial Statements
The Company’s Board of Directors [Management] is
responsible for the matters stated in section 134(5) of the
Companies Act’ 203 (“the Act”) with respect to the
preparation of these standalone Financial Statements that give
a true and fair view of the financial position, financial
performance and cash flow of the company in accordance with
the accounting principles generally accepted in India including
the accounting standards specified under section 133
[211(3C)] of the Act, read with Rule 7 of the Companies
(accounts) Rules, 2014.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INDEPENDENT AUDITOR’S REPORT – Continue ….
This responsibility [includes the design, implementation and
maintenance of internal controls] also includes maintenance of
adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate
accounting policies ; judgments and estimate that are
reasonable and prudent: and design implementation of
adequate financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting
records, relevant to the preparation and presentation of the
financial statements that give a true view and free from
material misstatement, whether due to fraud or error.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INDEPENDENT AUDITOR’S REPORT – Continue ….
AUDITOR’S RESPONSIBILITY
Our responsibility is to express an opinion on these
standalone financial statements based on our audit.
We have taken into account the
provisions of the Act, the accounting and
auditing standards and matters which are
required to be included in the audit
report under the provisions of the Act
and the Rules made there under.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INDEPENDENT AUDITOR’S REPORT – Continue ….
AUDITOR’S RESPONSIBILITY
We conducted our audit in accordance with
the Standards on Auditing [issued by the
Institute of Chartered Accountants of India]
specified under Section 143(10) of the Act.
Those standards require that we comply with
ethical requirements and plan and perform the
audit to obtain assurance about whether the
financial statements are free from material
misstatement.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INDEPENDENT AUDITOR’S REPORT – Continue ….
AUDITOR’S RESPONSIBILITY
An audit involves performing procedures
to obtain audit evidence about the
amounts and the disclosures in the
financial statements.The procedures
selected depend on the auditor’s
judgment, including the assessment of
the risks of material misstatement of
the financial statement, whether due to
fraud or error.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INDEPENDENT AUDITOR’S REPORT – Continue ….
In making those risk assessments, the auditor considers
internal financial control relevant to the Company’s
preparation of the financial statements that give a true and fair
view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of
expressing an opinion on whether the Company has in place
an adequate internal financial controls system over financial
reporting and the operating effectiveness of such controls[but
not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control]. An audit also
includes evaluating the appropriateness of the accounting
policies used and the reasonableness of the accounting
estimates made by the Company’s Directors, as well as
evaluating the overall presentation of the financial statements.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INDEPENDENT AUDITOR’S REPORT – Continue ….
INTERNAL FINANCIAL CONTROL
Section 143(3) (i) requires that auditors to state in
audit report (IN ALL COMPANIES]
Whether the company has adequate
internal financial controls system in
place and operating effectiveness of
such controls?
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INTERNAL FINANCIAL CONTROL -DEFINED
Section 134 (5) (e) -LISTED COMPANY- DRS
Explanation.—For the purposes of this clause,
the term "internal financial controls" means
policies and procedures adopted by the
company for ensuring the orderly and
efficient conduct of its business, including
adherence to company's policies, safeguarding
of its assets, the prevention and detection of
frauds and errors, the accuracy and completeness
of the accounting records, and the timely
preparation of reliable financial information;
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INDEPENDENT AUDITOR’S REPORT – Continue ….
INTERNAL FINANCIAL CONTROL
CARO inquired about the
adequacy of internal control
over purchase of inventory and
fixed assets and sale of goods
and services.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INTERNAL FINANCIAL CONTROL
Section 134 (5) (e) requires in DRS
in the case of a listed company,
had laid down internal financial
controls to be followed by the
company and that such internal
financial controls are adequate
and were operating effectively;
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
INTERNAL FINANCIAL CONTROL
Rule 8 (5) (viii) of (Account) Rules 2014
Directors
report
of
all
companies to state the details
in respect of adequacy of IFC
with reference to financial
statements.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
OPINION–
In our opinion and to the best of our
information and according to the
explanations to the Act in the
manner so required and give a true
and fair view in conformity with the
accounting
principles
generally
accepted in India,
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
OPINION–
(a) In the case of Balance Sheet, of the
affairs of the company as at March
31, 20xx and its
(b) In the case of Profit and Loss account
of the profit/loss for the year ended
on that date and
(c) In the case of CFS, of the cash flows
for the year ended on that date.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
(1) COMMENTS ON CARO 2015
As required by the Companies (Auditor’s Report) Order, 2015
(“the Order”), issued by the Central Government of India in
terms of sub-section (11) of section 143 of the Companies
Act, 2015, we give in the Annexure a statement on the matters
specified in paragraphs 3 and 4 of the Order, to the extent
applicable.
As required by Section 143 (3) of the Act, we report that
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
(1) COMMENTS ON CARO 2015
This report does not include a statement on the matters
specified in para 3 & 4 of the Companies (Auditor’s
Report) Order,2015, issued by the CG, in terms of section
143(11) of the Companies Act, 2013, since in our opinion
and according to the information and explanation given
to us, the said Order is not applicable to the company.
As required by Section 143 (3) of the Act, we report that
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
(2) As required by section 143(3) [227(3] of the Act:
(a) We have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit;
(b) Proper books of accounts clause SAME
(c) the report on the accounts of the branch office of
the Company audited under section 143(8) of the
Act by branch auditors have been sent to us and
have been properly dealt with by us in preparing
this report.
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
(2) As required by section 143(3) [227(3] of the Act:
(d) Agreement of FSs with Books of Accounts (SAME)
(e) Compliance with regard to AS 133 [211(3C)]
(f) Directors disqualification 164(2) [274(1)(g)]
(g) With respect to adequacy of internal financial
controls over financial reporting of the company
and operating effectiveness of such controls, refer
to our separate report in Annexure “A”
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
Rule 11 of the Companies (Audit & Auditors) Rules 2014
With respect to the other matters to be included
in the Auditor’s report in accordance with Rule
11 of the Companies (Audit and Auditors) Rule,
2014, in our opinion and to the best of our
information and according to the explanations
given to us.
(i) The Company has disclosed the impact of pending
litigations on its financial position in its financial
statements – Refer Note XX to the financial statements;
[or the Company does not have any pending litigations
which would impact its financial position]
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
(ii) The Company has made provision, as required under
the applicable law or accounting standards, for material
foreseeable losses, if any, on long-term contracts for
including derivative contracts –Refer Notes XX to the
financial statements;[or the Company did not have any
long-term contracts including derivative contracts for
which there were any material foreseeable losses.]
(iii)There has been no delay in transferring amounts,
required to be transferred, to the investor education and
Protection Fund by the Company {or, following are the
instances of delay in transferring amounts, required to be
transferred, to the investor Education and Protection fund
by the Company or there were no amounts which were
required to be transferred to the investor Education and
Protection Fund by the Company ].
BY- CA GOPAL JI AGRAWAL
…..REVISED AUDIT REPORT…...
OTHER MATTER [20.04.2015]
The Ministry of Corporate Affairs had on 01st April, 2014, vide its
General Circular No. 07/2014, Dissemination of Information with
Regards to the Provisions of the Companies Act, 2013 as Notified
Till date vis a vis Corresponding Provisions of the Companies Act,
1956, identified such sections of the Companies Act, 1956 that
would cease/ continue to have effect from 01st April 2014.
Accordingly, in terms of the aforesaid Circular, our reporting in
respect of section 227(3)(f) of the Companies Act, 1956, and
clauses (iii), (v)(a) and (b), (vi), (viii), (xiv), (xviii) of the Companies
(Auditor’s Report) Order, 2003 (dealing with sections 49, 58A,
58AA, 209(1)(d) and 301 of the Companies Act, 1956) is only for
the period beginning from ie ................. (date) till 31st March 2014
since as per the aforementioned MCA Circular these sections have
ceased to have effect from 01st April, 2014.”
BY- CA GOPAL JI AGRAWAL
An humble appeal
I will acknowledge your critical comments
and suggestions for making our
Coming Deliberations
more effective and copious
Gopal Ji Agrawal
B.COM LLB DISA IFRS (ICAI)
For any query, discussion or suggestion, please mail at
gjafca@gmail.com
THE COMPANIES
(AUDITOR’S REPORT)
ORDER 2015
BY- CA GOPAL JI AGRAWAL
CARO 2015
HISTORY OF CARO 2015
227(4A) introduced in 1965 w.e.f. 15-10-1965
No general or special order till 1975
1975-1987
MAOCARO 1975
1988 – 2003 MAOCARO 1988
2003-2014
CARO 2003
01/04/2015
CARO 2015
BY- CA GOPAL JI AGRAWAL
CARO 2015
NOT APPLICABLE:
•Banking Company
•Insurance Company
•U/s 8 Company
•One Person Company
•Small Company (paid up to 50 l, turnover 200 l)
•Private Company
paid up capital & reserves 50 L
Loans from banks & Fis
25 L
Turnover
500 L
BY- CA GOPAL JI AGRAWAL
CARO 2015 – NEW ADDITIONS
(v) In case, the company has accepted deposits,
whether the directives issued by RBI and the
provisions of section 73 to 76 or any relevant
provisions of the Companies Act and the rules made
there-under, where applicable, have been complied
with?
If not, the nature of contraventions should be stated;
If an order has been passed by Company Law Board
or National Company Law Tribunal or Reserve Bank
of India or any court or any other tribunal, whether
the same has been complied with or not?
BY- CA GOPAL JI AGRAWAL
CARO 2015 – NEW ADDITIONS
Vii(c) Whether the amount required
to be transferred to investor
education and protection fund in
accordance with the relevant
provisions of the Companies Act,
1956 (1 of 1956) and rules made
there-under has been transferred to
such fund within time.
Section 143(3)(j) R-11
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
(i)(c) if a substantial part of fixed
assets have been disposed off
during the year, whether it has
affected the going concern;
(iii)(a) Has the co. taken any loans,
secured or unsecured from
parties u/s 189 {301}.
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
In case of loans granted:
If so, give the number of parties and
amount
involved
in
the
transactions.
whether the rate of interest and
other terms and conditions of loans
given by the company, secured or
unsecured,
are
prima
facie
prejudicial to the interest of the
company;
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
V (a)
whether the particulars of
contracts or arrangements referred to in
section 301 of the Act have been entered
in the register required to be maintained
under that section;
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
V (b) whether transactions made in
pursuance of such contracts or
arrangements have been made at prices
which are reasonable having regard to
the prevailing market prices at the
relevant time;
(This information is required only in case
of transactions exceeding the value of
five lakh rupees in respect of any party
and in any one financial year).
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
vii) in the case of listed companies and/or
other companies having a paid-up capital and
reserves exceeding Rs.50 lakhs as at the
commencement of the financial year
concerned, or having an average annual
turnover exceeding five crore rupees for a
period of three consecutive financial years
immediately preceding the financial year
concerned, whether the company has an
internal audit system commensurate with
its size and nature of its business;
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
xii) whether adequate documents
and records are maintained in
cases where the company has
granted loans and advances on
the basis of security by way of
pledge of shares, debentures and
other securities; If not, the
deficiencies to be pointed out.
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
xiii) whether the provisions
of any special statute
applicable to chit fund have
been duly complied with? In
respect of nidhi/ mutual
benefit fund/societies;
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
xiv) if the company is dealing or trading in
shares, securities, debentures and other
investments, whether proper records have
been maintained of the transactions and
contracts and whether timely entries have
been made therein; also whether the shares,
securities, debentures and other securities
have been held by the company, in its own
name except to the extent of the exemption, if
any, granted under section 49 of the Act;
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
xvii) whether the funds raised on short-term
basis have been used for long term
investments; If yes, the nature and amount is to
be indicated;
xviii) whether the company has made any
preferential allotment of shares to parties and
companies covered in the Register maintained
under section 301 of the Act and if so whether
the price at which shares have been issued is
prejudicial to the interest of the company;
BY- CA GOPAL JI AGRAWAL
CARO 2015 – DELETION (S)
xix) whether securities or charge
have been created in respect of
debentures issued?
xx) whether the management has
disclosed on the end use of
money raised by public issues and
the same has been verified;
BY- CA GOPAL JI AGRAWAL
INDEPENDENT
AUDITOR’S
REPORT
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
Differentiate between general purpose FR
framework and a special purpose FR
framework?
A general purpose financial reporting
framework is a framework designed to meet
the needs of a wide range of users.
Special purpose financial reporting
framework is a framework designed to meet
the needs of a specific set of users.
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
A general purpose framework includes ‘a fair
presentation framework and a compliance
framework. Differentiate the two.
A fair presentation framework is where the
auditor gives a “true and fair” report, whereas a
compliance framework is one where the auditor
reports on whether the financial statements
comply with the requirements of the applicable
laws, or rules and regulations, or a set of
contractual terms and conditions.
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
A general purpose framework includes ‘a fair
presentation framework and a compliance
framework. Differentiate the two.
In fair presentation framework, management has
freedom to
(i) provide additional disclosure or
(ii) (ii) to depart with requirements of framework
in rare conditions to meet out the requirement
of true and fair FR.
In Compliance, it do not have such freedom.
BY- CA GOPAL JI AGRAWAL
INDEPENDENT AUDITORS’
REPORT

HOW MANY STANDARDS,
RULES AND REGULATIONS
GOVERN
INDEPENDENT
AUDITORS’
REPORT
OR
REPORING
BY
PRACTITIONERS IN INDIA?
BY- CA GOPAL JI AGRAWAL
Standards Governing Reporting
How many Standards govern reporting?
1. SA-700 Forming an opinion and reporting on FSs
2. SA 705 Modifications to the opinion in IARs
3. SA-706 Emphasis of Matter paragraphs and other
matter paragraphs in Independent Auditors’ Report
4. SA-710 Comparative Information-Corresponding
figures and comparative FSs
5. SA -720 Auditors Responsibilities in relation to
other information in documents containing AFSs
6. SA 800- Special Considerations- Audit of FSs
prepared in accordance with special purpose
framework
BY- CA GOPAL JI AGRAWAL
Standards Governing Reporting
How many Standards govern reportingcontinue>>>>
7. SA-805 Special Considerations- Audit of Single FS
and specific elements, accounts or items of a FS
8. SA-810 Engagement to report on Summary FSs
9. SRE -2400 Engagement to Review FSs
10. SRE-2410
Review of Interim Financial
Information performed by the Independent
Auditor of the entity
11. SAE 3400- The examination of prospective
financial information
12. SAE-3402 – Assurance Reports on controls at a
service organization
BY- CA GOPAL JI AGRAWAL
Standards Governing Reporting
How many Standards govern reportingcontinue>>>>
13. SRS-4400- Engagement to perform agreed upon
procedures regarding Financial Information
14. SRS-4410- Engagement to compile Financial
Information
BY- CA GOPAL JI AGRAWAL
Statements/Guidance Notes governing
Reporting
1. Statement on Reporting u/s 227(1A) of the
Companies Act, 1956
2. Statement on CARO 2003 u/s 227(4A)
3. Guidance Note on Independence of Auditors
4. Guidance note on certificate issued under
Acceptance of deposit Rules 1975
5. Guidance note on Auditor report and
certificates for special purpose
6. GN on Reports in Prospectus
7. GN on certificate on Corporate Governance
8. GN on section 227(3)(e) (f) of Companies
Act 1956 9.GN on reports on Abridged FS
BY- CA GOPAL JI AGRAWAL
Independent Auditor’s report
Title [IAR]
Addressee [Members]
REPORT ON FINANCIAL STATEMENTS
•Introductory paragraph
•Management’s responsibility paragraph
•Auditor’s responsibility paragraph
• Auditor’s opinion paragraph
• Other responsibilities paragraph

Matter Paragraph

Other Matter Paragraph
REPORT ON OTHER LEGAL & REGULATORY REQUIREMENTS
Signature
Date of the auditor’s report (after approval)
Place of signature
FRN and Membership Number
BY- CA GOPAL JI AGRAWAL
CORPORATE LAW OR IPC????
147 (2) If an auditor of a company
contravenes any of the provisions of
section 139 (Appointment), section 143
(powers and duties and AS & SA),
section 144 (not to render certain
services)
or section 145 (sign), the
auditor shall be punishable with fine
which shall not be less than twenty-five
thousand rupees but which may
extend to five lakh rupees:
BY- CA GOPAL JI AGRAWAL
CORPORATE LAW OR IPC????
Provided that if an auditor has
contravened such provisions knowingly
or wilfully with the intention to deceive
the company or its shareholders or
creditors or tax authorities, he shall be
punishable with imprisonment for a
term which may extend to one year and
with fine which shall not be less than
ONE LAC rupees but which may extend
to 25 LAC rupees.
BY- CA GOPAL JI AGRAWAL
CORPORATE LAW OR IPC????
147(3) Where an auditor has been convicted
under sub-section (2), he shall be liable to—
(i) refund the remuneration received by him
to the company; and
(ii) pay for damages to the company, statutory
bodies or authorities or to any other person for
loss arising out of incorrect or misleading
statements of particulars made in his audit
report.
Indeterminate amount, people and time???
BY- CA GOPAL JI AGRAWAL
CORPORATE LAW OR IPC????
147(5) FIRM IS LIABLE
Where, audit being conducted by an audit
firm, it is proved that the partner (s) has acted
in a fraudulent manner or abetted or in any
fraud by, or in relation to or by the company
or its directors or officers, the liability whether
civil or criminal as provided in the Act or any
other law for such act shall be of the
concerned partner and of firm jointly and
severally.
BY- CA GOPAL JI AGRAWAL
CORPORATE LAW OR IPC????
140 (5) WINDING UP AUDIT FIRM
The NCLT either suo motu or on an application made to it by
the Central Government or by any person concerned, if it is
satisfied that the auditor of a company has, whether directly
or indirectly, acted in a fraudulent manner or abetted or
colluded in any fraud by, or in relation to, the company or its
directors or officers, it may, by order, direct the company to
change its auditors.
Such an auditor shall not be eligible to be appointed as an
auditor of any company for a period of 5 years
from the date of passing of the order and the auditor shall
also be liable for action under section 447.
BY- CA GOPAL JI AGRAWAL
CORPORATE LAW OR IPC????
143(12)FAILURE TO DISCLOSE FRAUD
if in the course of the performance of his duties as
auditor, he has reason to believe that an offence
involving fraud is being or has been committed
against the company by officers or employees of
the company, auditor shall immediately report the
matter to the Central Government. In case of any
failure on his part to comply with this duty, he shall be
punishable with a fine which shall not be less than Rs.
1,00,000 but which may extend to Rs. 25,00,000.
BY- CA GOPAL JI AGRAWAL
CORPORATE LAW OR IPC????
245- CLASS ACTION SUIT- AUDITORS/FIRM
Minimum 100 or 10 % of the total members/deposit holders
Claim damages or compensation of demand any suitable
action
For any improper or misleading statement of particulars made in
the AUDIT REPORT or
any fraudulent, unlawful or wrongful act or conduct.
BY- CA GOPAL JI AGRAWAL
CORPORATE LAW OR IPC????
Punishment for false statement.
448. Save as otherwise provided in this Act, if in any
return, report, certificate, financial statement,
prospectus, statement or other document required
by, or for, the purposes of any of the provisions of
this Act or the rules made there-under, any person
makes a statement,—
(a) which is false in any material particulars, knowing
it to be false; or
(b) which omits any material fact, knowing it to be
material,
he shall be liable under section 447 [Fraud).
BY- CA GOPAL JI AGRAWAL
COMPANIES ACT 1956
SECTION 233 OF THE COMPANIES ACT, 1956
[Penalty for non-compliance by auditor with sections
227 and 229]
If any auditor's report is made, or any document of the
company is signed or authenticated, otherwise than in
conformity with the requirements of sections 227 [Powers
and duties of auditors] and 229 [Signature of audit report, etc]
the auditor concerned, and the person, if any, other than the
auditor who signs the report or signs or authenticates the
document, shall, if the default is willful, be punishable
with fine which may extend to [ten thousand rupees].
BY- CA GOPAL JI AGRAWAL
Objectives of the ‘ Reports’
1. A reasonable assurance that FSs are free from material
misstatements whether due to fraud or error & adding
credibility to the FSs
2. Opinion as to compliance of applicable financial
reporting framework
3. Educates the user about the responsibility of the
management for the preparation of the FSs and
Auditors responsibility of expressing the opinion about
its true and fair view
4. Addition of the word “Independent” distinguishes
Auditors from management
5. Make it clear the difference between IAR, CA
certificate, Review report, compliance report,
compilation report, or agreed upon procedure report(s).
BY- CA GOPAL JI AGRAWAL
Materiality -revised
Information is material if its
omission or misstatement
(individually or collectively) could
influence the economic decisions of
the users taken on the basis of
financial information. Materiality
depends on the SIZE or NATURE
or a combination of both. (Entity
specific).
BY- CA GOPAL JI AGRAWAL
Misstatement
A difference between the amounts,
classification, presentation, or disclosure
of a reported financial statement item
and the amount, classification,
presentation, or disclosure that is
required for the item to be in
accordance with the applicable financial
reporting framework.
Misstatements can arise from error or fraud.
BY- CA GOPAL JI AGRAWAL
How Credibility is ensured?
1. Overall presentation, structure and content of the FSs
in accordance with the Financial Reporting Framework
2. FSs including notes represent the underlying
transactions, circumstances and events in a true and
fair manner
3. Adequate consistent application and disclosure of
significant accounting policies
4. Use of reasonable accounting estimates
5. Relevant, reliable, comparable and understandable
information
6. Usage of appropriate title and terminology
7. Adequate disclosures even though not required by
reporting framework to make these statements
meaningful and faithful.
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
How does an auditor decide when a clean or
unmodified report may be issued?
(a) Sufficient appropriate audit evidence has
been obtained in accordance with SA 330;
(b) Uncorrected misstatements are,
individually or in the aggregate, not material in
accordance with SA 450;
(c) Requirements of the reporting framework
(eg., the Accounting Standards) have been
materially complied with;
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
(d) Management’s judgments in preparing the FSs are free from ‘bias’
(refer SA 260 and SA 540);
(e) The FSs adequately disclose the accounting policies selected and
applied;
(f) Those accounting policies are
(a) appropriate, and
(b) consistent with the financial reporting framework;
(g) The accounting estimates made by management are reasonable;
(h) The information presented in the financial statements is relevant,
reliable, comparable and understandable;
(i) There are adequate disclosures for users to understand the
effect of material transactions and events on the information
conveyed in the financial statements;
(j) The terminology used in the financial statements is appropriate,
and the financial reporting framework is adequately referred
to or described;
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
When an auditor can not issue clean report?
(i) The Auditor is unable to obtain sufficient
appropriate audit evidence in respect of any five
elements of the financial statements viz. Assets,
Liabilities, Income, Expense and Equity and other
reporting requirements as per governing financial
reporting framework
Or
(ii) Obtains sufficient appropriate audit evidence
which signifies that any of these elements or
disclosures has materially been misstated in the
financial statements.
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
Is it necessary that an auditor’s report
should follow a particular form and
style?
•Consistency in auditors’ reports (as
required under this SA)
•Promotes credibility globally.
•Promote the users’ understanding,
•Easy
to
identify
unusual
circumstances.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
When an auditor has compliance
framework also in addition to fair
presentation framework?
The report is divided into two parts
with headings namely:
1. Report on the Financial Matters
2. Report on Other Legal and
Regulatory Requirements
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
To whom report should be addressed?
Members in case of companies
Partners in case of firm.
President of India in case of PSU
 Governing Body as the case may be
BY- CA GOPAL JI AGRAWAL
SA-700- Forming an opinion and
reporting on Financial Statements
If the format or wordings of auditors report is
prescribed under any law or regulation??
SA 210 requires an auditor to evaluate:
•Whether users might misunderstand the assurance
obtained from the audit, and if so
•Whether providing additional explanation in the
auditor’s report can mitigate such misunderstanding.
If not then
Auditor should not include any reference to the audit
conducted in accordance with the SAs.
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
Differentiate between qualified and
modified audit report?
No report can be called as qualified or
modified as a whole. It is the opinion
paragraph which happens so.
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion in
Independent Auditors Report
Situation causes modifications in opinion?
A. There is a matter for which the auditor has
sufficient appropriate audit evidence to
determine that due to such matter the financial
statements are materially misstated,
and
(b) There is a matter for which the auditor is
unable to obtain sufficient appropriate audit
evidence to determine whether due to it the
financial statements may be materially misstated.
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
Nature of
matter giving
rise to
modification
Auditor’s
judgment about the
Materiality and Pervasiveness of the
Effects or Possible Effects on the
financial statements
Material but
Not Pervasive
Material and
Pervasive
FS are materially
misstated
Qualified opinion
Adverse opinion
Inability to obtain
sufficient appropriate
audit evidence
Qualified opinion
Disclaimer of opinion
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
Whether pervasiveness is to be seen individually of
each qualification or aggregate of all qualifications
taken together? discuss
Can an auditor express adverse opinion on some
statement and adverse opinion in other matters?
If there are number of qualifications but taken
together are though material but not pervasive to
the FSs as a while, what kind of opinion would be
expressed? Q35
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
Misstatements may arise in what situations?
Per SA 450- Evaluation of misstatements
identified during audit
(a)The appropriateness of the selected
accounting policies;
(b)The application of the selected
accounting policies,
or
(c) The appropriateness or adequacy of
disclosures in the financial statements.
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
Are the auditors required to discuss the matters
giving rise to modifications to the management?
Can an auditor express modified opinion under
one framework and clean opinion under another
framework of the same FSs? iGAAP V. IFRS
Is there a difference in the way an opinion is
modified under new SAs? SA-706, heading,
customized title.
BY- CA GOPAL JI AGRAWAL
SA-705- Modifications to the opinion
in Independent Auditors Report
How the modified paragraphs to be given?
1. Title as Qualified Opinion, Adverse
Opinion or Disclaimer of opinion
2. The word except for is to be used
instead of Subject to
3. Change in the Auditors responsibility
paragraph
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs
and Other Matter Paragraphs In IARs
Whether MP in the report make
opinion modified?
It was so in the erstwhile AAS 28 but
not now?
Is not part of audit opinion but just an
additional communication.
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs and
Other Matter Paragraphs In IARs
Whether MP in the report is required to be
given?
“A paragraph included in the auditor’s
report that refers to a matter appropriately
presented or disclosed in the financial
statements that, in the auditor’s judgment,
is of such importance that it is fundamental
to users’ understanding of the financial
statements.”
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs and
Other Matter Paragraphs In IARs
Exp giving MP in audit opinion?
1. An uncertainty relating to the future outcome of an
exceptional litigation or regulatory action.
2. Early application (where permitted) of a new
Accounting Standard that has a pervasive effect on
the financial statements in advance of its effective
date.
3. A major catastrophe that has had, or continues to
have, a significant effect on the entity’s financial
position.
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs and
Other Matter Paragraphs In IARs
Whether all significant matters should be placed in
MP?
“Widespread use of
emphasis of matter
paragraphs diminishes the importance of the
auditor’s communication of such matters”.
“An Emphasis of Matter paragraph is not a
substitute for disclosures in the financial
statements that the applicable financial
reporting framework requires management to
make.”
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs and
Other Matter Paragraphs In IARs
Differentiate between MP & OMP?
An Other Matter Paragraph is defined as “A
paragraph included in the auditor’s report
that refers to matters other than those
presented or disclosed in the financial
statements that, in the auditor’s judgment,
is relevant to users’ understanding of the
(a) audit,
(b) the auditor’s responsibilities or
(c) the auditor’s report.”
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs and
Other Matter Paragraphs In IARs
Examples for OMP
1. Branch audit conducted by other
auditors
2. Expression of opinion under 2
framework separately. AS V IFRS
3. The FSs are special purpose FS but
prepared as GPFSs hence can say
that it is meant only for addressee.
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter
Paragraphs and Other Matter
Paragraphs In IARs
Differentiate between MP & OMP?
Moreover there are following difference:
1. In MP, matters are appropriately presented
and disclosed in FSs but OMP are not
presented or disclosed in FSs.
2. MP is fundamental with reference to
understanding of FSs while OMP is relevant to
users’ understanding in respect of 3 matters
only(a)audit,(b)the auditor’s responsibilities
or (c ) the auditor’s report.”
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs
and Other Matter Paragraphs In IARs
If any fact is resulting in modification of
report, can it be a subject of Matter
paragraph?
Emphasis of Matter is given only in respect
of matters that are “appropriately
presented or disclosed.
These are not the alternate of modifications.
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs
and Other Matter Paragraphs In IARs
Requirement as to MP given in IAR? 4
(A)Emphasis of matter paragraph is given
immediately after the opinion paragraph;
(B)It has a heading “Emphasis of Matter” (to make its
nature very clear to the users);
(C)The paragraph must provide a reference to the
matter being emphasized and where, in the
financial statements, that matter in its elaborated
form is to be found; and
(D)The paragraph contains a declaration that the
auditor’s opinion is not modified in respect of the
matter emphasized.
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs and
Other Matter Paragraphs In IARs
Where an OMP is placed in the IARs?
If the other matter pertains to the audit, the
auditor’s responsibility or the auditor’s report
insofar as expressing an opinion on the financial
statements is concerned, the other matter
paragraph is placed immediately below the
opinion paragraph. If there is also an Emphasis of
Matter paragraph following the opinion
paragraph, then the Other Matter paragraph is
placed immediately below the Emphasis of Matter
paragraph.
BY- CA GOPAL JI AGRAWAL
SA-706- Emphasis of Matter Paragraphs and
Other Matter Paragraphs In IARs
Where an OMP is placed in the IARs?
If the Other Matter pertains to audit, the
auditor’s responsibility or the auditor’s
report insofar as other reporting
responsibilities of the auditor are concerned
(eg., reporting responsibilities under CARO,
2003), an other matter paragraph is included
in the section of the auditor’s report titled:
“Report on Other Legal and Regulatory
Requirements”.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
When an auditor has compliance framework
also in addition to fair presentation
framework?
The report is divided into two parts with
headings namely:
1. Report on the Financial Matters
2. Report on Other Legal and Regulatory
Requirements
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
Inventories are misstated resulting in qualified report as the impact is
material but not pervasive:
The Company’s inventories are carried in the Balance Sheet at Rs.
XXX. Management has not stated the inventories at the lower of cost
and net realisable value but has stated them solely at cost, which
constitutes a departure from the Accounting Standards referred to
in sub-section (3C) of section 211 of the Act. The Company’s records
indicate that had management stated the inventories at the lower of
cost and net realisable value, an amount of Rs. XXX would have been
required to write the inventories down to their net realisable value.
Accordingly, cost of sales would have been increased by Rs. XXX,
and income tax, net profit and shareholders’ funds would have
been reduced by Rs. XXX, Rs. XXX and Rs. XXX, respectively.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
The financial statements are materially
misstated due to the non-consolidation of a
subsidiary. The material misstatement is
deemed to be pervasive to the financial
statements. The effects of the misstatement
on the financial statements have not been
determined because it was not practicable to
do so. An adverse audit opinion is given
under the circumstances.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
The auditor was unable to obtain sufficient
appropriate audit evidence regarding an
investment in a foreign affiliate accounted
for under equity method. The possible
effects of the inability to obtain sufficient
appropriate audit evidence are deemed to be
material but not pervasive to the financial
statement. The audit opinion is qualified for
the misstatement.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
The auditor was unable to obtain sufficient
appropriate audit evidence about a single element
of the financial statements. That is, the auditor was
unable to obtain audit evidence about the financial
information of a joint venture investment that
represents over 90% of the Company’s net assets.
The possible effects of this inability to obtain
sufficient appropriate audit evidence are deemed
to be both material and pervasive to the financial
statements. A disclaimer of audit opinion is given
in the circumstances.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
The auditor was unable to obtain sufficient
appropriate audit evidence about multiple
elements of the financial statements. That is, the
auditor was unable to obtain audit evidence about
the entity’s inventories and accounts receivable.
The possible effects of this inability to obtain
sufficient appropriate audit evidence are deemed
to be both material and pervasive to the financial
statements. A disclaimer of audit opinion is given
in the circumstances.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations-MP
and OMP
MATTER PARAGRAPH
We draw attention to Note X to the financial
statements which describes the uncertainty
related to the outcome of the lawsuit filed
against the Company by XYZ Company.
Our opinion is not qualified in respect of
this matter.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations-MP
and OMP
OTHER MATTER PARAGRAPH
We did not audit the financial statements of certain
subsidiaries, whose financial statements reflect total
assets (net) of Rs. XXXX as at March 31, 20XX, total
revenues of Rs. XXXX and net cash outflows
amounting to Rs. XXXX for the year then ended.
These financial statements have been audited by other
auditors whose reports have been furnished to us by
the Management, and our opinion is based solely on
the reports of the other auditors. Our opinion is not
qualified in respect of this matter.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
Basis for Qualified Opinion
As more fully explained in the note X of Schedule XX to
the financial statements, the Company has not accrued
interest in respect of outstanding inter corporate
deposits of Rs xxx million which as at March 31, 20XX
amounts to Rs. xx million. Had this interest been accrued
the net loss for the year would have been Rs xx million as
against the reported net loss of Rs xx million),
accumulated losses as at March 31, 20XX would have
been Rs xx million as against the reported figure of Rs
xx million, and current liabilities as at March 31, 20XX
would have been Rs xx million as against the reported
figure of Rs xx million.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
Basis for Qualified Opinion
As detailed in Note XXX to the financial
statements, pursuant to the Scheme of
Arrangement, PQR Inc., USA, a wholly owned
subsidiary of the Company whose financial
statements reflect total assets of Rs xx cr (US$
xx converted at US$ 1 = Rs 45) as at March 31,
20XX was merged with the Company on the
basis of unaudited financial statements which
have not been verified by us.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
Basis for Qualified Opinion
The confirmation from Head Office for the
balance of Rs XXX as at March 31, 20X1 (Rs
XXX as at March 31, 20XX) was not available
for our verification. Accordingly, we are unable
to comment on the balance in Head Office
Account as at the year-end and the consequential
effect, if any, on the expenses incurred for the
year and/or on the assets/ liabilities of the Liaison
Office.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
Basis for Qualified Opinion
We draw attention to note X of schedule XX of the financial
statements wherein the management has explained its reasons for
preparing the financial statements on a going concern basis. As at
30 September 20XX, the current liabilities exceed its current assets
by Rs. XXX and the entity has incurred cash loss amounting to Rs.
XXX during the period. These factors raise substantial doubt as to
the Company’s ability to continue as going concern and therefore,
may not be able to realise its assets and discharge its liabilities in
the normal course of business. The financial statements do not
include any
adjustments relating to the recoverability and
classification of recorded asset amounts and classification of
liabilities that may be necessary if the Company is unable to
continue as a going concern..
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
MATTER PARAGRAPH
We draw attention to Note XX in Schedule XX of the
financial statements relating to exercise of option by the
Company to recognize gains and losses arising on
fluctuation of foreign exchange rates on long term
monetary items, to assets or to a reserve as detailed in
the Note, consequent to the amendment to Accounting
Standard 11, “The Effects of Changes in Foreign
Exchange Rates”, resulting in the profits for the year
being higher by Rs xxx million and its consequential
impact on the reserves and surplus and carrying cost of
assets as detailed therein.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
MATTER PARAGRAPH
We invite attention to Note No. X of Schedule XX –
Notes to the Financial Statements, regarding
impairment of fixed assets wherein, due to the highly
technical nature of the plant and machinery, we have
relied on the estimates and assumptions made by
the Company’s internal technical department which
we prima facie found to be reasonable in arriving at
the recoverable value of the fixed assets at the
Kaushambi cash generating unit of the Company. Our
opinion is not qualified in respect of this matter.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
MATTER PARAGRAPH
We draw attention to Note XX of Schedule XXB
to the financial statements regarding nondisclosure of the impact of fair value method of
accounting on net results and Earnings Per
Share as required by the Guidance Note on
accounting for employee share- based payments
issued by the Institute of Chartered Accountants
of India. Our opinion is not qualified in respect
of this matter.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
MATTER PARAGRAPH
We draw attention to Note 6 to the Consolidated
Financial Statements regarding investments in
certain subsidiaries aggregating Rs. XXX lacs which
are yet to break even. At reporting date, the
Company’s share of cumulative losses in these
subsidiaries is Rs.XXX lacs against which provision
for diminution of Rs. XXX lacs is considered as
adequate by the management, based on business
plans. Our opinion is not qualified in respect of this
matter.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
Bases for Disclaimer of Opinion
We have not been able to obtain sufficient appropriate
audit evidence with regard to the recoverability of
Sundry Debtors, particularly having regard to: (i) the
aggregate amount of debtors outstanding for a period
exceeding six months being Rs. XXX (ii) debtors in
respect of sales during the period aggregating Rs.
XXX being fully unrecovered, and (iii) the debtors
outstanding at the commencement of the financial year
aggregating Rs. XXX being yet to be recovered to the
extent of Rs. XXX.
BY- CA GOPAL JI AGRAWAL
Discussion on different situations
Bases for Disclaimer of Opinion
We have not been able to obtain sufficient appropriate
audit evidence with regard to the recoverability of
Sundry Debtors, particularly having regard to: (i) the
aggregate amount of debtors outstanding for a period
exceeding six months being Rs. XXX (ii) debtors in
respect of sales during the period aggregating Rs.
XXX being fully unrecovered, and (iii) the debtors
outstanding at the commencement of the financial year
aggregating Rs. XXX being yet to be recovered to the
extent of Rs. XXX.
BY- CA GOPAL JI AGRAWAL
REPORTING FRAMEWORK
General Purpose Reporting Framework
It is Fair Presentation Framework or True &
Fair View reporting framework
Special Purpose Reporting Framework
A financial reporting framework designed to
meet the financial information needs of
specific users. The financial reporting
framework may be a fair presentation
framework or a compliance framework. [SA
800.6.b)
BY- CA GOPAL JI AGRAWAL
ACCOUNTING
STANDARDS
&
ENGAGEMENT
STANDARDS
Backbone of AUDITORS’ REPORT
BY- CA GOPAL JI AGRAWAL
COMPANIES ACT 2013
Accounting Standards [22]
Section 2, 52(3), 55(2), 66(3), 129(1), 139(5), 143(3), 230(7),
232(2), Schedule II & III
Auditing Standards [8]
Section 2, 132(1), 132(2), 143(2), 143(9), 143(10),
BY- CA GOPAL JI AGRAWAL
SAP [1982]
AAS [2002]
ES & SQC-1
[01/04/2008]
BY- CA GOPAL JI AGRAWAL
Categories of Engagement Standards
[AAS / SAP]
BY- CA GOPAL JI AGRAWAL
Accounting Standards
Whether AS are
corporate Entities?
applicable
only
on
Whether AS are applicable to
charitable
institutions like trust, society or club etc?
How many Accounting Standards Interpretations
are in existence?
Are the applicability criteria for Corporate and non
corporate entities are alike?
BY- CA GOPAL JI AGRAWAL
Accounting Standards
Criteria for Small Medium sized company (SMC)
1. Equities or Debts are NOT listed or in
the process of listing
2. NOT a bank, financial institution or
insurance company
3. Turnover NOT exceeding 50 crore
4. Borrowings NOT exceeding 10 Crore
(any time during the year)
5. NOT a Holding or Subsidiary of Non
SMC
BY- CA GOPAL JI AGRAWAL
Accounting Standards
Reporting by Small Medium sized company (SMC)
“The Company is a Small and
Medium Sized Company (SMC) as
defined in the General Instructions in
respect of Accounting Standards
notified under the Companies Act,
1956. Accordingly, the Company has
complied
with
the Accounting
Standards as applicable to a Small
and Medium Sized Company.”
BY- CA GOPAL JI AGRAWAL
Accounting Standards
Criteria for Level – I Entity –Commercial, Industrial,
Business Reporting Entities
1. Equities or Debts are listed or in the
process of listing
2. Banks, Co-op banks, financial
institutions or insurance company
3. Turnover exceeding 50 crore
4. Borrowings exceeding 10 Crore
(any time during the year)
5. Holding or Subsidiary of Non SME
BY- CA GOPAL JI AGRAWAL
Accounting Standards
Criteria for Level – II Entity
1. Turnover exceeding 100(40) lacs but
not exceeding 50 crore
2. Borrowings exceeding 1Crore but
not exceeding 10 crore (any time
during the year)
3. Holding or Subsidiary of any above
BY- CA GOPAL JI AGRAWAL
Accounting Standards
Criteria for Level – III Entity
1. Turnover NOT exceeding 100 (40)
lacs
2. Borrowings NOT exceeding 1Crore
BY- CA GOPAL JI AGRAWAL
Accounting Standards
Reporting by Small Medium sized Entity (SME)
“The entity is a Level II or Level III SME as
per announcement by ICAI in respect of
applicability of the Accounting Standards
hence
has
not
disclosed
certain
information pursuant to the exemptions or
relaxations given to it and has complied
with the Accounting Standards insofar as
they are applicable to entities falling in
Level II or Level III (as the case may be).”
BY- CA GOPAL JI AGRAWAL
Accounting Standards
Whether we are reporting
this clause in TAX AUDITS?
What aspects are covered in Accounting Standards or
the pillars of Accounting Standards?
BY- CA GOPAL JI AGRAWAL
Accounting Standards
AS
DESCRIPTION OF AS
APPLICABILITY AS PER TYPE OF ENTITY
CORPO
-RATE
SMC
Non
Non –
Corporate
Level
SMC
III
II
I
1 Disclosure of Accounting Policies
Y
Y
Y
Y
Y
2
Y
Y
Y
Y
Y
N
Y
N
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
3
4
5
6
7
Valuation of Inventories
Cash Flow Statement
Contingencies and Events Occurring
After the Balance Sheet Date
Net Profit Or Loss for the Period, Prior
Period Items and Changes in Accounting
Policies
Depreciation Accounting
Construction Contracts
BY- CA GOPAL JI AGRAWAL
Accounting Standards
AS
DESCRIPTION OF AS
APPLICABILITY AS PER TYPE OF ENTITY
9
10
11
12
13
14
15
Revenue Recognition
Accounting for Fixed Assets
The Effect of Changes in Foreign
3
Exchange Rates
Accounting for Government Grant
Accounting for Investments
Accounting for Amalgamation
Employee Benefits
CORPO
-RATE
SMC
Non
Non –
Corporate
Level
SMC
III
II
II
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y* Y
Y* Y* Y
Y* WITH SOME EXEMPTIONS & RELAXATIONS
BY- CA GOPAL JI AGRAWAL
Accounting Standards
AS
DESCRIPTION OF AS
APPLICABILITY AS PER TYPE OF ENTITY
16
17
18
19
20
21
22
Borrowing Costs
Segment Reporting
Related Party Disclosure
Leases
Earning Per Share
Consolidated Financial Statements
Accounting for taxes on Income
CORPO
-RATE
SMC
Non
Non –
Corporate
Level
SMC
I11
II
I
Y
Y
Y
Y
Y
N
Y
Y
Y
Y
Y
Y
N
Y
Y
Y* Y
Y* Y* Y
Y* Y
N
N
Y
N
Y
N
N
N
Y
Y
Y
Y
Y
Y* WITH SOME EXEMPTIONS & RELAXATIONS
BY- CA GOPAL JI AGRAWAL
Accounting Standards
AS
DESCRIPTION OF AS
APPLICABILITY AS PER TYPE OF ENTITY
23
24
25
26
27
28
29
Accounting for investment in Associates
in Consolidated Financial Statements
Discountinuing Operations
Interim Financial Reporting
Intangible Assets
Financial Reporting of Interest in Joint
Ventures
Impairment of Assets
Provisions, Contingent Liabilities and
Contingent Assets
CORPO
-RATE
SMC
Non
Non –
Corporate
Level
SMC
I11
II
I
N
Y
N
N
N
Y
Y
N
Y
Y
N
Y
N
N
Y
Y
Y
Y
Y
Y
N
Y
N
N
N
Y* Y
Y* Y* Y
Y* Y
Y* Y* Y
Y* WITH SOME EXEMPTIONS & RELAXATIONS
BY- CA GOPAL JI AGRAWAL
TRUE & FAIR VIEW- FACTS
1. Overall presentation, structure and content of
the FSs in accordance with the FR Framework
2. FSs including notes represent the underlying
transactions, circumstances and events in a fair
manner
3. Adequate consistent application and disclosure
of significant accounting policies
4. Accounting estimates are reasonable
5. Information is relevant, reliable, comparable and
understandable (meets quality requirements)
6. Appropriate title and terminology to be used
7. Adequate disclosures though not required.
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT- OLD
Announcements of ICAI (December 2011)
Section 227(3)(g) of CA 1956, requires the auditors
to report “Whether the cess payable u/s 441A has
been paid and if not the details of cess not so paid”
“The auditor should report in his audit
report under the clause the Govt. has not
notified the rules u/s 441A, therefore we are
unable to comment on the same.”
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT- NEW
New Announcements of ICAI (January 3rd-4th 2014)
1. Regarding change in reporting u/s 227 (3)(bb) in
SA 700 illustrative report related to branch
auditors as per sec 228(3)( c)
2. Accounting Standard – 211 (3C) Vs. 133 (143)
3. Auditors Responsibility Paragraph-opinion with
regard to internal control for the PP of the FSs
4. Profit & Loss Account Vs. Statement of Profit
&loss
5. Reporting under CARO 2003 (non applicable
clauses)
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT-CHANGE 1
Section 227 (3) (bb) requires the auditor to report on
branch audit u/s 228(3( c) – Inadvertent error- SA 700
The report on the accounts of the branch
offices audited under section 228 by a person
other than the company’s auditor has been
forwarded to us as required by clause (c) of
sub-section (3) of section 228 and have been
dealt with in preparing our report in the
manner considered necessary by us.
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT-CHANGE 2
Auditors Responsibility Paragraph –IC
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, the auditor
considers internal control relevant to the Company’s
preparation and fair presentation of the financial statements in
order to design audit procedures that are appropriate in the
circumstances but not for the purpose of
expressing an opinion on the effectiveness of
the Company’s internal control
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT-CHANGE 3
PROFIT & LOSS A/C Vs. STATEMENT OF PROFIT & LOSS
Old Schedule VI used the term “Profit & Loss
Account”.
Revised Schedule VI (now III) used the term
Statement of Profit & Loss
Section 227 (still applicable) uses OLD term
Section 143 (3) (d) used the term Profit & Loss A/c??
What is to be done now?
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT- 4
Whether IAR to be issued u/s 143 of the
Companies Act, 2013 or Section 227 of
the Companies Act, 1956?
MCA circular no. 8 dated 04/08/2014
ICAI clarification dated 08/04/2014
All financial commencing on or after
01/04/2014 would be governed by new
such provisions.
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT- 5
Section 133 notified since 12/09/2013
(AS)- 211 (3C)
GC 16/2013 dated 18/09/2013 states that
the provisions of corresponding 98
sections 1956 (includes 211(3C) cease to
have effect. BUT
GC 15/2013 dated 13/09/2013 clarified
that AS notified shall remain continue.
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT- 5
The clause under Management responsibility &
Report on legal and other regulatory matters
MAY be changed:
Accounting Standards referred to in sub-section (3C)
of section 211 of the Companies Act, 1956 (“the
Act”) (which continue to be applicable in
respect of Section 133 of the Companies Act,
2013 in terms of General Circular 15/2013
dated 13th September 2013 of the Ministry of
Corporate Affairs)
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT- 6
Paragraph 80 of the Statement on CARO
2003 – addition
The
auditor
MAY
aggregate/ club the fact of
non applicability of different
clauses of CARO, 2003.
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT- 7
[10/02/2014]
Inclusion of financial statements (audited or
unaudited) in CFS
1.Component is unaudited but not
material
II. Component is audited but not
material
The principal auditor may or may not
disclose in report. If disclose, follow SA
706- OMP
BY- CA GOPAL JI AGRAWAL
AUDITORS’ REPORT- 7
[10/02/2014]
Inclusion of financial statements (audited or
unaudited) in CFS
III.Component is audited by others
and material [follow 706 OMP]
IV. Component is material but
unaudited
[Follow SA 705- Modification in
report]
BY- CA GOPAL JI AGRAWAL
STATUTORY AUDITORS
RESPONSIBILITY
Whether the Statutory Auditors of
an Entity is responsible for the
omissions or misstatements in the
Financial Reporting of
management i.e. MA &D or MC or
MR which are stated separately in
Annual Report?
BY- CA GOPAL JI AGRAWAL
Statutory Auditors’ Responsibility
SA 720 THE AUDITOR’S RESPONSIBILITY IN RELATION TO OTHER
INFORMATION IN DOCUMENTS CONTAINING AUDITED
FINANCIAL STATEMENTS
deals with the auditor’s
responsibility in relation to other information in documents
containing audited FSs the auditor’s report thereon. In the
absence of any separate requirement in the particular
circumstances of the engagement, the auditor’s opinion
does not cover other information and the auditor has no
specific responsibility for determining whether or not
other information is properly stated. However, the auditor
reads the other information because the credibility of
the audited financial statements may be
undermined by material inconsistencies between
the audited financial statements and other
information. Ref: Para A1)
BY- CA GOPAL JI AGRAWAL
An humble appeal
I will acknowledge your critical comments
and suggestions for making our
Coming Deliberations
more effective and copious
Gopal Ji Agrawal
B.COM LLB DISA IFRS (ICAI)
For any query, discussion or suggestion, please mail at
gjafca@gmail.com