MLP & Co., a Chartered Accountants firm, was appointed to conduct the statutory audit for F.Y. 2023-24 for the company RST Ltd. CA. Kushal was…

CA Final · Advanced Auditing, Assurance and Professional Ethics · MTP · May 2025
MLP & Co., a Chartered Accountants firm, was appointed to conduct the statutory audit for F.Y. 2023-24 for the company RST Ltd. CA. Kushal was the engagement partner for the said assignment. During the ongoing engagement of the audit, at the end of the third quarter, two limited review reports were issued by MLP & Co. Before the issuance of the third quarter's limited review report, the management of the company imposed a limitation on the scope of the audit that CA Kushal considered likely to result in the need to express a qualified opinion or to disclaim an opinion on the financial statements, and accordingly, he requested that management remove such limitations. However, the management refused to remove the said limitation. What was the responsibility of MLP & Co. with respect to the issue of limited review report at the time of resignation?
(A) Limited Review Report for third quarter was required to be issued.
(B) Limited Review Report for third quarter was required to be issued and consequently, after its issue, audit report for the full year is also required to be issued.
(C) No further Limited Review Report was required to be issued as it was already issued for the second quarter at the time of resignation.
(D) Limited review report for third quarter was required to be issued subject to the terms of the audit engagement.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Limited Review Report for third quarter was required to be issued and consequently, after its issue, audit report for the full year is also required to be issued.

Topics: Standard on Auditing (SA), Reporting

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