ABC Ltd. appointed CA Jai to conduct the statutory audit. During the audit, the auditor identified some errors in the financial records and he got…

CA Intermediate · Auditing and Ethics · MTP · May 2025
ABC Ltd. appointed CA Jai to conduct the statutory audit. During the audit, the auditor identified some errors in the financial records and he got it corrected. The audited statements were then submitted to tax authorities for compliance purposes. The audit procedures also helped the company improve its record-keeping processes. However, the management assumed that since the financial statements were audited, they could be used to predict future profits with certainty. In view of above, which of the following is not a likely benefit of auditing?
(A) Since auditing is connected to future events, audited information can be easily relied upon by users.
(B) Errors or frauds may be discovered during audit.
(C) Government authorities can make use of audited accounts for different purposes.
(D) It can help in bringing out deficiencies in maintenance of financial records.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

Since auditing is connected to future events, audited information can be easily relied upon by users.

Topics: Nature, Objective and Scope of Audit

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