M/s Pihu & Associates are the statutory auditors of Brick Ltd. for FY 2023-24. During the audit, CA Arpit, the engagement partner noticed the…

CA Final · Advanced Auditing, Assurance and Professional Ethics · MTP · November 2024
M/s Pihu & Associates are the statutory auditors of Brick Ltd. for FY 2023-24. During the audit, CA Arpit, the engagement partner noticed the following: Notices received from various regulatory authorities.Payments of various fines and penalties.Unusual cash payments.Payments to various government employees not supported by any document.Heavy payments to legal counsels. CA Arpit should consider the above as indicative of:
(A) (A) Doubt on Internal Controls of Brick Ltd.
(B) (B) Doubt of non-compliance with laws by Brick Ltd.
(C) (C) Doubt on the accounting system of Brick Ltd.
(D) (D) Doubt on the going concern assumption of Brick Ltd.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

(B) Doubt of non-compliance with laws by Brick Ltd.

Topics: Standard on Auditing (SA), Audit Evidence

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