14 December 2011
Disclaimer of audit means a situation where auditor is not in a position to express an opinion either due to non availability of audit evidence or where audit evidence obtained is not sufficient and appropriate. Further he can also give disclaimer of opinion when some limitation on his scope of audit is placed.
Adverse opinion is placed when there is a uncorrected misstatement which is material enough to negate the expression of qualified opinion.
to ensure that such power of auditor is not misused by him he should have sufficient evidence to justify the qualification expressed in his report.
Further Section 227(4) of Companies Act 1956 requires an auditor to state the reason for qualification. CARO also requires an auditor to state reasons under Paragraph 4 for any qualifications given in the audit report.
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