“Indicate the precise nature of auditor’s liability in the following situations and support your
views with authority, if any
Based upon the legal opinion of a leading advocate, X Ltd. made a provision of
Rs 5 crores towards Income Tax liability. The assessing authority has worked out the
liability at Rs 5 crores. It is observed that the opinion of the advocate was inconsistent
with legal position with regard to certain revenue items.”
How to identify whether the advocate is a mgmt expert or auditor’s expert?
Hmm, I have answer of the same. Unfortunately while shifting site some answers got deleted.
Generally answers give hint whether it is management expert or audit expert. Of question is silent take assumption , generally ICAI has taken management expert as assumption so take this assumption.
Now in this question it is clearly stated company did accounting as per experts , so here it is management expert. Now I know pm has used SA 620 which is for auditor’s expert. Pm answer is inappropriate, give reference of 500 and use similar content and also specify pm answer is in appropriate.