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    Question

    Auditor discovers numerous round-dollar manual

    adjustments booked post year-end, with treasury head’s sign-off. What's the most appropriate auditor response?
    A Assume rounding errors only Correct Answer Incorrect Answer
    B Increase testing and interview treasury head Correct Answer Incorrect Answer
    C Report to SEBI immediately Correct Answer Incorrect Answer
    D Issue disclaimer Correct Answer Incorrect Answer
    E Accept if immaterial Correct Answer Incorrect Answer

    Solution

    Post balance sheet manual round-dollar adjustments are fraud risk indicators (SA 240). Auditor must expand testing, evaluate appropriateness, and interview responsible personnel before forming an opinion.

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