Page 42 - CA Final PARAM Digital Book.

referred actuary. He is not agreed with the matters to be covered by the report whereas Mr. X agreed
with the same.

Part IV -- Conclusion
➢ Hence, as per SA 299, Mr. Z is suggested to express his own opinion through a separate report whereas
Mr. X and Mr. Y may provide their joint report for the same.

Case II (Excellent Bank Ltd)
Part III -- Facts
➢ In the instant case, Excellent Bank Ltd. Appoints 3 joint auditor for the financial year ending
31.03.2019. All the joint auditors divided the work with mutual consent. The only work which
remained undivided was verification of Consolidation. In accordance with SA 299, all the joint auditors
are responsible for the same.

Further, during audit of zone, CA Z, one of the joint auditors expressed a concern about internal
control in one of the large corporate branches situated in his zone, however, this irregularity was not
reported as 2 of the joint auditors (i.e. majority of the joint auditors ) were not in favour of the same.
Later on, fraud has been detected in the same branch which was audited by CA. Z

Part IV -- Conclusion
➢ In the present scenario, CA. Z brought this matter in the notice of the other 2 joint auditors and the
decision for not reporting was taken on majority basis and no separate opinion was expressed through
separate audit report pointing out irregularity. Thus, all the 3 joint auditors will be held responsible
for the fraud detected in the branch audited by CA. Z as per SA 299

QNO Difference of Opinion Amongst Joint Auditors New Course – (SM23)
28.150 TITANIUM CNO-- SA299.100/ SA299.080
"
A, B and C are joint auditors of a company. B is of the opinion that there are material misstatements in
financial statements of a company which, if accounted for, A, B and C in financial statements for ₹ 25 crore

to a loss of ₹ 5 crore. He, therefore, wants an adverse opinion to be expressed in audit report. However, A
and B do not concur with his views and are inclined to accept management’s version. Is B required to go by
majority opinion of 2-1?
Answer Where the joint auditors are in disagreement with regard to the opinion or any matters to be covered by the
audit report, they shall express their opinion in a separate audit report. A joint auditor is not bound by the

views of the majority of the joint auditors regarding the opinion or matters to be covered in the audit report
and shall express opinion formed by the said joint auditor in separate audit report in case of disagreement.
Therefore, B is not required to go by majority opinion of 2-1.

In such circumstances, the audit report issued by the joint auditors shall make a reference to the separate
audit report issued by the other joint auditor. Further, separate audit report shall also make reference to the
audit report issued by other joint auditors. Such reference shall be made under the heading “Other Matter
Paragraph” as per SA 706.

QNO Reliance on other Joint Auditor and reporting Old Course -- (M19M)
28.200 TITANIUM CNO - 299.140
NMN & Co LLP and ABC & Associates LLP are the joint statutory auditors of BHS Ltd. BHS Ltd. is a listed
company and has been in existence for the last 50 years. Since beginning this company was audited by MQS
& Associates but due to audit rotation, the company had to bring in new auditors. Considering the size of
the company, two auditors were appointed as joint auditors. Since the company is new to these auditors
and the concept of joint auditors to whom audit work has been divided, management had a discussion and
understood that each joint auditor is responsible only for the work allocated to him, whether or not he has
prepared a separate report on the work performed by him. Advise.
Answer

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