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Joshna asked 1 year ago

Sir A & B are appointed as joint auditors of a firm. Valuation of inventory is seen by A. But there is no documentation of division of work among them. Later major undervaluation of inventory is found. So now A will be held liable for such undervaluation or both A & B?

1 Answers
RaviRavi Staff answered 1 year ago

There is a violation of SA 299 as the division of work has not been documented. In the normal course “A” will be held liable for negligence. If “A” refuses to accept sole responsibility for the fault, “B” have to prove by other ways and means of evidence that the particular area of audit was exclusively done by “A” only. If “B” proves they then, it will save himself or else both will be held responsible.

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