SPOM & Co. is a firm of Chartered Accountants established in 2010 with major focus on Audit Practice. In F.Y. 2024-25, firm has four partners…

Misstatement refers to difference between the amount, classification, presentation, or disclosure of a reported financial statement item and the amount, classification, presentation, or disclosure that is required for the item to be in accordance with the applicable financial reporting framework. Misstatements can arise from error or fraud. Few examples of misstatements are: i. Charging an item of capital expenditure to revenue or vice versa. ii. Difference in disclosure of a financial statement item vis-vis its requirement in applicable financial reporting framework. iii. Selection or application of inappropriate accounting policies. iv. Difference in accounting estimate of a financial statement item vis-a-vis its appropriateness in applicable financial reporting framework. v. Intentional booking of fake expenses in statement of profit and loss. vi. Overstating receivables in financial statements by not writing off irrecoverable debts. vii. Overstating or understating inventories.