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Harshwardhan Chandak asked 2 years ago

Sir what will be the correct answer of MCQ no 4 & 5 of Chapter no. 8 Audit of consolidated F/s. in Module 2 of CA final??

3 Answers
RaviRavi Staff answered 2 years ago

So MCQ 4 is of “AJ Private Limited”
Keeping concepts apart, we can clearly say b and c options are incorrect as they talk about auditor communicating to ROC & SEBI
now a and d both talk about accepting financial statements, d talks about 10% criteria, no such criteria is specified so answer is “a”
l=now as per concepts best answer is, some components on consolidated financial statements can remain unaudited but they should not be material, if its material auditor will have to qualify. Now nothing is mentioned about how big JV is, they simply say without JV group is 75% with JV it is exceeding 80% and so on. 

RaviRavi Staff answered 2 years ago

MCQ 5 is of “Advik Ltd”
There is no requirement that principal auditor should only audit or review all components, its absolutely fine if others do audit and principal auditor sees audit reports given by them.  

RaviRavi Staff answered 2 years ago

Yes there is new regulation by SEBI which talks about auditor “reviewing audits done by other auditors of components” but it is applicable to listed entities and it is not yet discussed in detail in our course.

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