Question

    While auditing the books of a listed company, the

    auditor finds that management is unwilling to provide audit evidence for certain related party transactions. The auditor suspects concealment of material facts. What should be the auditor’s response?
    A Issue an unmodified audit report Correct Answer Incorrect Answer
    B Resign from audit Correct Answer Incorrect Answer
    C Report under CARO only Correct Answer Incorrect Answer
    D Issue a qualified or disclaimer opinion Correct Answer Incorrect Answer
    E Approve accounts without evidence Correct Answer Incorrect Answer

    Solution

    If sufficient appropriate audit evidence is not available, and the item is material, the auditor must issue a qualified or disclaimer opinion, depending on severity, as per SA 705.

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