Page 61 - CA Inter MCQ Book

CA RAVI TAORI CA INTER AUDIT MCQs
CHAPTER 08. AUDIT REPORT

Part 1 - SA 700

700.1 M19R
CA. Goofy has been appointed as an auditor for audit of a complete set of financial statements of
Dippy Ltd., a listed company. The financial statements of the company are prepared by the
management in accordance with the Accounting Standards prescribed under section 133 of the
Companies Act, 2013. However, the inventories are m is stated which is deemed to be material but
not pervasive to the financial statements. Based on the audit evidence obtained, CA. Goofy has

concluded that a material uncertainty does not exist related to events or conditions that may cast
significant doubt on the entity’s ability to continue as a going concern in accordance with SA 570.
Further, CA. Goofy is also aware of the fact that a qualified opinion would be appropriate due to a
material misstatement of the Financial Statements. State what phrases should the auditor use while
drafting such opinion paragraph?
a) In our opinion and to the best of our information and according to the explanations given to us,
except for the effects of the matter described in the Basis for Qualified Opinion section of our
report, the aforesaid financial statements present fairly, in all material respects, or give a true
and fair view in conformity with the applicable financial reporting framework.
b) In our opinion and to the best of our information and according to the explanations given to us,
with the foregoing explanation, the aforesaid financial statements present fairly, in all material
respects, or give a true and fair view in conformity with the applicable financial reporting
framework.
c) In our opinion and to the best of our information and according to the explanations given to us,
subject to the misstatement regarding inventories, the aforesaid financial statements present
fairly, in all material respects, or give a true and fair view in conformity with the applicable
financial reporting framework.
d) In our opinion and to the best of our information and according to the explanations given to us,
with the explanation described in the Basis for Qualified Opinion section of our report, the
aforesaid financial statements present fairly, in all material respects, or give a true and fair view
in conformity with the applicable financial reporting framework.

700.3 SM21
SA-700 requires the use of specific headings, which are intended to assist in making auditor’s reports
that refer to audits that have been conducted in accordance with SAs more recognizable. Which of
the following is that specific heading:
a) Key audit matters
b) Basis of opinion
c) Date
d) All of the above

700.4 N19M

An Audit report is:
a) an opinion drawn on the entity’s financial statements to make sure that the records are true
and correct representation of the transactions they claim to represent.
b) an opinion drawn on the entity’s books of accounts to make sure that the records are true and
fair representation of the transactions they claim to represent.
c) an opinion drawn on the entity’s financial statements to make sure that the records are true
and fair representation of the transactions they claim to represent.
d) an opinion drawn on the entity’s books of accounts to make sure that the records are true and
correct representation of the transactions they claim to represent.

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