Non-compliance with accounting standard

Dear All,

I have received one balance sheet. The company has not complied with AS-15. The fact of the same has been mentioned as follow by the statutory auditor-

"In our opinion, the balance sheet and profit & loss account covered by this report complies with the accounting standards referred to in sub section (3C) of Section 221 of the companies act 1956 to the extent applicable except reported in NOTE-22, SIGNIFICANT ACCOUNTING POLICES & NOTES ON ACCOUNTS.

When coming to notes to accounts, the auditor has mentione about non-compliance of accounting standard-15 and further said that "its effect on financial statements can not be ascertained"

I wanted to know-

1) Whether Auditor can mention non-compliance as above? i.e. Just by saying "except reported in notes to account" or he should specifically mentioned about non compliance in the main body of audited report.

2) Whether the text "its effect on financial statements can not be ascertained" is sufficient or he must also give reason as to why it could not be ascertained.

Kindly do the needful.

The wording of the qualified report is very similar to the Unqualified opinion, but an explanatory paragraph is added to explain the reasons for the qualification after the scope paragraph but before the opinion paragraph. The introductory paragraph is left exactly the same as in the unqualified opinion, while the scope and the opinion paragraphs receive a slight modification in line with the qualification in the explanatory paragraph.

The scope paragraph is edited to include the following phrase in the first sentence, so that the user may be immediately aware of the qualification. This placement also informs the user that, except for the qualification, the rest of the audit was performed without qualifications:

“Except as discussed in the following paragraph, we conducted our audit...

1. i think u must mention in para first and then give an qualified opinion on the basis of para ,immediately after the paragraph,so tht users and investors r aware of the opinion

2. u must explain or have explanatory paragraph for the uncertainties faced and explain the consequences

regards

sripal jain