Raj panchalraj panchal asked 2 years ago

IF LOAN AGREEMENT IS NOT FURNISHED TO  AUDITOR DURING AUDIT THAN HOW COME THE EFFECT IS “NOT PERVASIVE”?(ref.QNO119.30- SA 705)

1 Answers
RaviRavi Staff answered 2 years ago

For an auditor, while verifying any loans and advances, one of the most important audit evidence is the loan agreement. Therefore, the absence of such document in the present case, tantamount to a material misstatement in the financial statements of the company. However, the inability of CA Madhu to obtain such audit evidence is though material but not pervasive so as to require him to give a disclaimer of opinion.