This just struck to me while doing Audit, Pls give your opinions.
Suppose Mr A is an auditor of a Pvt Co. which is generally promoter driven and major stakeholder are the promoters itself.
Mr A receives a pretty high Amount as Audit fees as the turnover of Co. is also high.
Now while performing audit Mr A finds out misstatement due to fraud which is very much material. Now as per Auditing standards and ethics Mr A enquired with the management (Promoter and other directors) and the management was of the opinion that such fraud should not be reported and they would continue with such and if reported Mr A would not be reappointed.
Mr A wanted to include this in his report, but the fear of losing the audit appointment, as it received pretty high amount of audit fees from this audit struck him.
What should Mr A do? Do you have any suggestion where by "Saap bhi mar jaaye aur laathi bhi na tutte" can be applied i.e he can report it and can even get reappointed?
CAclubindia
