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Qualification of audit report

Nikson Kuriakose (Article Assistant) (48 Points)

03 August 2016

Company has taken a loan over assets and after 30 days but before 300 days, no charge is created.. Whether qualification of audit report is mandatory in this situation?

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Shreesh Kumar (CA Final) (122 Points)
Replied 04 August 2016

Dear Nickson,

As per SA 250 “Consideration of Laws and Regulations in an Audit of Financial Statements”

Auditor is not responsible for prevention or detection of non compliance of Laws and Regulations. However he should obtain general understanding of regulatory requirement framework and how company complies with it.

Further he should obtain sufficient and appropriate evidence w.r.t compliance with laws directly affecting determination of amount and disclosure in financial statements.

As far the reporting is concerned if non compliance is intentional and material, Auditor should first communicate to TCWG if TCWG is itself involved with such non compliance then communicate to Next Level like Independent Director or Audit Committee. If they also have no intension to make good this mistake then Auditor can give Qualified or Adverse opinion.

Regards

Shreesh Kumar

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