The document discusses final matters related to auditing, including written representations, subsequent events, and facts discovered after the auditor's report.
It defines written representations as written statements from management to confirm certain matters or support audit evidence. It outlines the representations required by ISAs regarding management responsibilities, financial statements, and specific assertions.
It describes the auditor's course of action if oral or written representations are provided, including evaluating the reliability of written representations. It also outlines steps the auditor would take if written representations are not provided.
The document explains the auditor's responsibility regarding events between the financial statement date and the auditor's report date. It lists procedures for the auditor to fulfill this responsibility, such as inquiring with management
Advance Auditing & Professional Ethics by Sumit AggarwalSUMIT AGGARWAL FCA
The entire Syllabus been covered in less than 600 pages covering Shorts Notes & Solved Question Papers for last 34 Exams. This Book is written and designed in such a way that, student reading first time can study whole syllabus in just 2 weeks and revise whole syllabus in just 2 days.
FB page: https://www.facebook.com/EASY.CA49
Statutory audit is a very crucial topic which is a must for any student appearing for CA examination. We have tried to cover as much as possible in these notes.
QLI is one of the best CA, CS and CFA Classes. We have excellent faculty for CPT, IPCC and CA Final.
This is presentation on Auditing by my friend Rohin Nadaf which was presented during ITT training of Institute of Chartered Accountants of India (ICAI)
1.)Four Types of Audit Report by Independent Auditors
2.)The Steps to be Done by the Auditors Before They Receive New Engagement With Clients
3.)The Contents Emphasis in the Audit Engagement
Advance Auditing & Professional Ethics by Sumit AggarwalSUMIT AGGARWAL FCA
The entire Syllabus been covered in less than 600 pages covering Shorts Notes & Solved Question Papers for last 34 Exams. This Book is written and designed in such a way that, student reading first time can study whole syllabus in just 2 weeks and revise whole syllabus in just 2 days.
FB page: https://www.facebook.com/EASY.CA49
Statutory audit is a very crucial topic which is a must for any student appearing for CA examination. We have tried to cover as much as possible in these notes.
QLI is one of the best CA, CS and CFA Classes. We have excellent faculty for CPT, IPCC and CA Final.
This is presentation on Auditing by my friend Rohin Nadaf which was presented during ITT training of Institute of Chartered Accountants of India (ICAI)
1.)Four Types of Audit Report by Independent Auditors
2.)The Steps to be Done by the Auditors Before They Receive New Engagement With Clients
3.)The Contents Emphasis in the Audit Engagement
Advanced audit
For downloading this contact- bikashkumar.bk100@gmail.com
Prepared by Students of University of Rajshahi
Md. Aminul Islam Milon
Md. Maznur Rahman
Md. Tarikul Islam Tarif
Md. Mamunur Rahman
Subho Placid Besra
Rahid Hasan
Bikash Kumar
Md. Ali Haidar
Md. Alomgir Hosen
Khairul Basar
Risul Islam Tonu
Md. Asik Mahamud
Ahsan Ullah
Tanveer Shaharear
Md. Imran Hossain
Arif Hossain (leader)
Md. Aslam Hossain
Md. Faysal Alam
Md. Junayed
Md. Nazrul Islam
Md. Rasel Mollah
Disclosures in Board Report by Trupti Ranjan Mohanty.pptxssuser1b54031
Insights into Disclosures in Board Report: This includes all the broad disclosures required to be given in the Board Report of a Company under Companies Act, 2013 and SEBI Listing Regulations. Various cases/litigations have been referred to indicate the significance of each disclosure.
Similar to FINAL MATTERS - AUDITING STUDY NOTES (20)
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
2. Auditing – Study Notes Chapter 19 Final Matters
PART A – WRITTEN REPRESENTATION
LLOO 11:: DDEEFFIINNIITTIIOONN OOFF WWRRIITTTTEENN RREEPPRREESSEENNTTAATTIIOONN::
Definition of written representations:
A written statement by management provided to the auditor to confirm certain matters or to
support other audit evidence.
Objective of written representation is:
1. To obtain acknowledgement from management and TCWG that they have fulfilled their
responsibilities in an audit.
2. To support certain matters for which representation is crucial in obtaining evidence.
Use of Written Representation as Audit Evidence:
Written Representation is an evidence, however, it is not a sufficient appropriate audit evidence
unless corroborated by other evidence which is expected to exist. It is only a supporting evidence
and does not affect nature, timing and extent of other evidence to be obtained.
Form and Date of written representations:
Written representations shall be:
addressed to auditor.
in the form of a letter signed by persons responsible for preparation of financial statements
e.g. CEO and CFO.
dated as near as possible, but not after, the date of auditor’s report.
CONCEPT REVIEW QUESTION
The audit of Three Stars Limited (TSL) for the year ended December 31, 2014 was completed and initial report was issued
on February 15, 2015. The meeting of the board of director was held on February 22, 2015 to approve the accounts and
thereafter, being an auditor, you have been required to issue signed auditor’s report for the purposes of issuing financial
statements to shareholders. As per the provisions of International Standards on Auditing, you also need to obtain a
written representation from your client (TSL) before issuing the signed auditor’s report.
Required:
In the light of the given situation, answer the following:
(i) Briefly explain the term “written representation”. Why does an auditor need to obtain a written representation from
management and those charged with governance. (04 marks)
(ii) What is the most commonly used form of a written representation and what should be the date of written
representation in the above scenario? Discuss in the light of ISA – 580. (04 marks)
(iii) Who is responsible to provide the written representation on behalf of the company. (02 marks)
(ICMAP – 2015 August)
LLOO 22:: WWRRIITTTTEENN RREEPPRREESSEENNTTAATTIIOONNSS RREEQQUUIIRREEDD BBYY IISSAAss::
Written Representation about Management’s Responsibilities:
Representations about Financial Statements:
Management has fulfilled its responsibility for the preparation of financial statements in accordance
with the AFRF, as agreed in the terms of the audit engagement.
Representations about Information Provided to Auditor:
a) Management has provided the auditor with all relevant information and access, as agreed in the
terms of the audit engagement, and
b) All transactions have been recorded in financial statements.
2 By: Muhammad Asif, ACA
3. Auditing – Study Notes Chapter 19 Final Matters
Written Representation about Specific Assertions:
Representations about Financial Statements:
1. Significant assumptions and accounting estimates are reasonable. (ISA 540)
2. Related party relationships and transactions have been appropriately accounted for and
disclosed in accordance with the requirements of AFRF. (ISA 550)
3. All events subsequent to the date of financial statements for which AFRF requires
adjustment or disclosure, have been adjusted or disclosed. (ISA 560)
4. The effects of uncorrected misstatements are immaterial, both individually and in the
aggregate, to the financial statements as a whole. (ISA 450)
Representations about Information Provided to Auditor:
1. We have disclosed to you the results of our assessment of the risk that the financial
statements may be materially misstated as a result of fraud. (ISA 240)
2. We have disclosed to you all information in relation to fraud or suspected fraud that we are
aware of and that affects the entity involving management, employees or others. (ISA 240)
3. We have disclosed to you the identity of the entity’s related parties and all the related-party
relationships and transactions of which we are aware. (ISA 550)
4. We have disclosed to you all known instances of non-compliance or suspected non-
compliance with laws and regulations affecting financial statements. (ISA 250)
Auditor may also obtain additional representations if he considers necessary.
CONCEPT REVIEW QUESTION
What are the situations in which written representation from the management is mandatory? (07 marks)
(CA Final – Winter 2008)
Representations by management are considered as audit evidence. Describe the basic elements of a management
representation letter. (04 marks)
(CA Inter – Spring 2009)
LLOO 33:: AAUUDDIITTOORR’’SS CCOOUURRSSEE OOFF AACCTTIIOONN IIFF OORRAALL RREEPPRREESSEENNTTAATTIIOONN IISS PPRROOVVIIDDEEDD::
Although oral representation is an evidence, however it is less reliable than written representation.
Auditor should document oral representation but should also request management to provide
representation in written.
LLOO 44:: AAUUDDIITTOORR’’SS CCOOUURRSSEE OOFF AACCTTIIOONN IIFF WWRRIITTTTEENN RREEPPRREESSEENNTTAATTIIOONN IISS PPRROOVVIIDDEEDD::
Evaluating Reliability of written representation:
If management provides written representation to auditor, auditor is required to evaluate
reliability of representations made by management.
To evaluate reliability of written representation, auditor considers following matters:
Consistency with other representations and other evidence from different sources.
Competence, integrity, ethical values or diligence of management.
Whether individual making written representation is well informed on such matters.
Accuracy of representations made in the past.
If reliability of written representation is doubtful:
If written representation is inconsistent with other evidence:
Auditor should consider:
3 By: Muhammad Asif, ACA
4. Auditing – Study Notes Chapter 19 Final Matters
Whether his risk assessment of that area is still appropriate. If not, revise risk assessment.
Consider need to revise nature, timing and extent of audit procedures to respond to revised
risk.
If auditor has concerns about integrity of management, he may take further action as described
below.
If auditor has concerns about integrity of management:
Auditor shall:
determine effect of such concerns on reliability of other representations and audit evidence
in general.
document the concerns and should consider withdrawing from engagement in extreme
cases, unless TCWG take appropriate actions. If withdrawal is not possible, he may express
disclaimer of opinion.
CONCEPT REVIEW QUESTION
One of the objectives of obtaining a written representation from management is to ensure that the management knows
and acknowledges its responsibility for the preparation of the financial statements and for the completeness of the
information provided to the auditor.
Required:
Specify the situations which may create doubts as to the reliability of written representations. What course of action
would the auditor take in such a situation? (07 marks)
(CA Inter – Spring 2011)
You are the audit partner of XYZ & Company, Chartered Accountants. The following matters are under your consideration:
(a) Asif Limited has made certain investments and has classified them as long term investments. The management has
also provided written representation in this regard.
However, before the finalization of financial statements the company disposed of some of the said investments.
(04 marks)
(b) Mansoor Limited has entered into significant related party transactions during the year which are approved by the
Board of Directors and appropriately disclosed. The management has also agreed to provide a written representation but
you have not received it yet. (03 marks)
Required:
Analyse the above situations and explain how you would proceed in the above matters.
(CA Inter – Spring 2016)
LLOO 55:: AAUUDDIITTOORR’’SS CCOOUURRSSEE OOFF AACCTTIIOONN IIFF WWRRIITTTTEENN RREEPPRREESSEENNTTAATTIIOONN IISS NNOOTT
PPRROOVVIIDDEEDD::
If management refuses to provide written representation to auditor, auditor shall perform
following procedures.
Discussion with management:
Auditor shall discuss the matter with management and shall inquire reason for refusal.
Impact on different aspects of audit:
Auditor shall:
Re-evaluate integrity of management and consequently revise risk of material
misstatement, including risk of fraud.
Take appropriate actions, including considering effect on other audit procedures (including
other representations and evidence provided by management).
If auditor has serious concerns about integrity of management, consider withdrawing from
the audit.
Impact on audit report:
Not providing representation is a scope limitation. Auditor may express qualified opinion (if
possible effect is material) or disclaimer of opinion (if possible effect is pervasive).
4 By: Muhammad Asif, ACA
5. Auditing – Study Notes Chapter 19 Final Matters
CONCEPT REVIEW QUESTION
As part of the audit process, the management provides written representations to confirm certain matters in connection
with the audit.
Required:
(a) State the matters that you will consider as an auditor while assessing the reliability of representations made by the
management. (05 marks)
(b) Describe the course of action available to an auditor if the management refuses to provide representation on a
particular issue. (05 marks)
(CA Inter – Spring 2012)
PART B – SUBSEQUENT EVENTS
LLOO 66:: EEVVEENNTTSS OOCCCCUURRRRIINNGG BBEETTWWEEEENN DDAATTEE OOFF FFIINNAANNCCIIAALL SSTTAATTEEMMEENNTTSS AANNDD DDAATTEE OOFF
AAUUDDIITTOORR’’SS RREEPPOORRTT::
Auditor’s Responsibility/Purpose:
Auditor’s responsibility is to perform audit procedures to obtain sufficient appropriate audit
evidence that all events occurring between the date of the financial statements and the date of
the auditor’s report have been identified by management and have been adjusted or disclosed in
financial statements, as appropriate.
To meet his responsibility, auditor performs Active Review of subsequent events (i.e. auditor
actively searches for significant subsequent events).
Auditor’s Procedures to fulfill responsibility:
1) Inquiring of management and TCWG as to whether any subsequent events have occurred
which might affect the financial statements (auditor may make specific inquiries relating to
adjusting events or non-adjusting events) e.g.
a. New borrowings
b. Significant sales of assets
c. New shares or debentures issued
d. Assets destroyed by fire, flood etc or appropriated by government.
2) Obtaining an understanding of procedures established by management to identify
subsequent events.
3) Reading minutes of subsequent meetings of the entity’s owners, management and TCWG
and inquiring about matters discussed at any such meetings for which minutes are not yet
available.
4) Reading the entity’s subsequent interim financial statements, if any.
5) Requesting management to provide written representation that “all events subsequent to
the date of the financial statements requiring adjustment or disclosure have been adjusted
or disclosed”.
CONCEPT REVIEW QUESTION
(a) Briefly describe the extent of auditor’s responsibility relating to subsequent events occurring between the date of the
financial statements and the auditor’s report. (03 marks)
(b) Identify any five procedures that the auditor may undertake to fulfill the responsibility as discussed in (a) above.
(05 marks)
(CA Inter – Autumn 2013)
5 By: Muhammad Asif, ACA
6. Auditing – Study Notes Chapter 19 Final Matters
LLOO 77:: FFAACCTTSS DDIISSCCOOVVEERREEDD AAFFTTEERR AAUUDDIITTOORR’’SS RREEPPOORRTT ((RREEVVIISSIIOONN IINN AAUUDDIITTOORR’’SS RREEPPOORRTT))::
Auditor’s Responsibility/Purpose:
Auditor has no responsibility to perform any audit procedures regarding financial statements after
the date of auditor’s report. However, auditor is responsible to respond appropriately to facts
which affect financial statements and auditor’s report but that become known to the auditor after
the date of the auditor’s report.
For this purpose, auditor performs Passive Review of subsequent events (i.e. auditor does not
search subsequent events actively; rather he relies on information from management)
Auditor’s Procedures to fulfill responsibility:
If after the date of auditor’s report, auditor becomes aware of a misstatement in financial
statements (e.g. an error/fraud in financial statements), auditor shall:
Discuss with management to determine whether financial statements need amendment.
If amendment is required, auditor shall inquire whether management agrees to amend
financial statements or not.
If management agrees to amend financial statements
If management does not agree to amend
financial statements
When financial
statements have not
been issued
Management’s Responsibilities:
–Management shall amend financial statements before issuance.
Auditor’s Responsibilities:
Auditor shall:
–Carry out necessary audit procedures on the amendment.
–Provide a new audit report (on the amended financial statements).
1. If auditor’s report has not been
provided to entity, auditor shall modify
the opinion.
2. If auditor’s report has been provided to
entity, auditor shall notify management
and TCWG not to issue the financial
statements to third parties.
When financial
statements have
been issued
Management’s Responsibilities:
–Management take necessary steps to ensure that users do not rely
on previously issued financial statements.
–Management shall amend financial statements to re-issue them.
These financial statements shall include an additional note to explain
the reason for the amendment.
Auditor’s Responsibilities:
Auditor shall:
– Review the steps taken by management to ensure that users do not
rely on previously issued financial statements.
–Carry out necessary audit procedures on the amendment.
–Provide a new audit report (on amended financial statements) that
shall include an Emphasis of Matter Paragraph or Other Matter
Paragraph, referring to the
note in financial statements that explains reason for the
amendment in financial statements, or
earlier report provided by the auditor.
Auditor shall take appropriate action to
ensure that users are informed not to rely
on financial statements and auditor’s
report.
6 By: Muhammad Asif, ACA
7. Auditing – Study Notes Chapter 19 Final Matters
CONCEPT REVIEW QUESTION
Describe the auditor’s responsibility for subsequent events occurring between:
(i) The year-end date and the date the auditor’s report is signed; and
(ii) The date the auditor’s report is signed and the date the financial statements are issued. (05 marks)
(ACCA December 2011)
ABC, Chartered Accountants released a qualified audit report on financial statements of Normal Limited due to a
disagreement on tax provisions. Before issuance of financial statements and audit report to the shareholders, the
management revised the financial statements on the basis of subsequent decisions announced by the appellate
authorities. The adjustment made in revised financial statements now agrees with the previously suggested audit
adjustments. The revised financial statements have been provided to ABC for fresh audit report.
Required:
List the steps which ABC, Chartered Accountants should take before issuing a revised (unqualified) audit report.
(06 marks)
(CA Inter – Spring 2008)
Masoom & Co. Chartered Accountants have audited the financial statements of Cunning Limited. The financial statements
have been issued after getting proper approval of the Board of Directors and audit report signed by the auditors. After
some time, the auditors came to know that a major lawsuit was decided against the company subsequent to the year-end
but before the audit report was signed by the auditors. The issue existed at the balance sheet date.
The outcome of the lawsuit was not brought to the knowledge of the auditors. Had it been known to the auditors, the
financial statements would have required proper adjustments in this respect. State auditors’ responsibilities in this
situation. Also analyze the situation, if the issue of financial statements for the following period is imminent. (06 marks)
(CA Inter – Spring 2004)
7 By: Muhammad Asif, ACA