New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    An auditor finds material misstatements due to fraud but

    the management refuses to take corrective action. What should be the auditor’s next step?
    A Modify the audit opinion Correct Answer Incorrect Answer
    B Withdraw from audit silently Correct Answer Incorrect Answer
    C Inform the tax department Correct Answer Incorrect Answer
    D Take no further action Correct Answer Incorrect Answer

    Solution

    If fraud is not rectified, the auditor must modify the opinion in accordance with SA 705.

    Practice Next