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a) Describe five statutory disclosures that an auditor is required to make in his audit report. b) When there is a disagreement between the auditor and...

      

a) Describe five statutory disclosures that an auditor is required to make in his audit report.
b) When there is a disagreement between the auditor and the management, the auditor is
able to conclude objectively that he has received all information and explanations
necessary for the purpose of the audit. However, his conclusion differs-with the position
taken by management or with the view given by the financial statements.
With reference to the above statement, explain five circumstances that might give rise to
disagreements between the management and the auditor.

  

Answers


Kavungya
(a) Statutory disclosures that an auditor is required to make:-
• The auditor's should state whether he has obtained all the information and explanations,
which to the best of their knowledge and belief were necessary.
• The auditor should also state whether in his opinion, proper books of account have been
kept by the company.
• Whether the company's balance sheet and profit and loss account dealt by the report are
in agreement with the books of accounts and returns.
• Whether, in his opinion and to the best of their information the financial statements give a
true and fair view.
• In the case of a holding company submitting group financial statements whether in their
opinion, the group financial statements have been properly prepared and give a true and
fair view.

(b) Circumstances giving rise to disagreements include:-
• Application of inappropriate accounting policies by management.
• Disagreements on amounts and facts included in the financial statements.
• Disagreement on interpretation of an accounting standard or even legislation.
• Disagreement as to the manner or extent of disclosure of facts or amounts in the financial
statements.
• They can disagree on the mode of the disclosure of information.
• Inconsistency of accounting policies.
Kavungya answered the question on May 15, 2019 at 08:46


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