Audit report qualification

Statutory Audit 1224 views 5 replies

Anil

1638 Points Posted on 30 May 2014

A private company is supposed to register itself under Shop & Establishement Act. But it has not done so. Instead in the books it has provided as liability – Registration fees and penalty payable to the department as payable to government concerned department under current liability. The questions in this context are:

Should statutory auditor qualify his audit report.? What should be the wordings for qualification?
If the report is not to be qualified, should this matter be reported in notes to accounts. IF yes, what should be the wordings for the notes?

Replies (5)

CA Amol Gulavani

M Com ACA

106 Points Posted on 10 June 2014

According to me there may not be any reporting on this matter.

Absence of Shop License is not doing to affect the accounts. As far as provision is concerned, there is nothing wrong is making provision if the company is in process of obtaining the license.

Gangatharan

Partner

108 Points Posted on 10 June 2014

In your audit report, u can emphasis this opinin instead of qualifying. (As per SA:704)

In CARO also u can mention under the head 'Statuatory dues'

Anil

1638 Points Posted on 20 June 2014

Thank you Mr.Gangatharan. Could you please provide me a website link to soft copy of SA 704 ? . I would like to see the point where it says I can emphasise my opinion and not quaify it.

Thanks.

Milind M. Kulkarni

Practicing CA

597 Points Posted on 01 July 2014

Please refer the link to SA's issued by ICAI. Please refer SA's 700-799 on Audit conclusions and Reporting. However, there is no SA 704 appearing in the list as mentioned by Gangatharan.

https://www.icai.org/new_post.H T M L?post_id=450&c_id=141