CA RK, the auditor of Shipra Limited resigned from the post due to personal reasons. CA SP was appointed as the subsequent auditor of the company by…

CA Final · Advanced Auditing, Assurance and Professional Ethics · RTP · November 2024
CA RK, the auditor of Shipra Limited resigned from the post due to personal reasons. CA SP was appointed as the subsequent auditor of the company by the Board of Directors. During the conclusion of the audit for the 2023-24, should CA SP mention CA RK 's resignation in the Companies (Auditor's Report) Order 2020?
(A) No. CARO 2020 does not state any requirements to report resignation of auditor. However, the same needs to be mentioned by CA SP in the Audit Report under Other Matter Paragraph, as per SA 706.
(B) Yes. As per clause (xviii) of para 3 of CARO, CA SP should report the resignation of CA RK and state if he has taken into consideration the issues or objections raised by CA RK.
(C) No. Since the resignation of CA RK is due to his own personal reason, the same need not be reported under CARO.
(D) Yes. As per clause (xxi) of para 3 of CARO, CA SP should report the resignation of CA RK and state if he has taken into consideration the issues or objections raised by CA RK.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Yes. As per clause (xviii) of para 3 of CARO, CA SP should report the resignation of CA RK and state if he has taken into consideration the issues or objections raised by CA RK.

Topics: Professional Ethics & Liabilities of Auditors, Standard on Auditing (SA), Reporting

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