If the auditor believes that the financial statements
prepared on the basis of the entity's income tax are not adequately
titled, the auditor should:
A)Issue a resignation of opinion.
B)Explain the terminology used in the notes to the financial
statements.
C)Issue a compilation report.
D)Modify the auditor's report to reveal any reservation.
SOLUTION
It is the duty of Auditor to report.
1)Whether the Financial statements are prepared as per Finanacial reporting Framework
2) Whether Financial Statement reflect true & fair view.
Any deviations from above cast a basis of modification in Auditor's Report.
Since auditor believes that the financial statements prepared on the basis of the entity's income tax are not adequately titled
it is a deviation from Finanacial reporting Framework and the Auditor's Report needs to be Modified.
Further modification may be be of 3 types
1)Qualified
2) Adverse
3) Disclaimer
Therefor in the view of above Auditor need to Modify the auditor's report to reveal any reservation
Hence "OPTION D" is Correct
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