ADM & Associates, a medium-sized audit firm, has recently been appointed as the statutory auditor of Muonic Ltd., a listed pharmaceutical…

CA Final · Advanced Auditing, Assurance and Professional Ethics · MTP · September 2025
ADM & Associates, a medium-sized audit firm, has recently been appointed as the statutory auditor of Muonic Ltd., a listed pharmaceutical company involved in complex global operations and intensive R&D activities. The audit is being led by CA Rajul, an engagement partner. The company was previously audited by a Big 4 firm, which withdrew citing limitations in audit scope. During planning, CA Rajul observes that while her team has good experience with standard manufacturing audits, they lack exposure to pharmaceutical sector audits, especially in relation to R&D accounting and global regulatory requirements. Despite this concern, the Managing Partner insists that the team follow their standard procedures to ensure the audit is completed on time, especially due to the company's obligations under listing regulations. CA Rajul is concerned about whether the firm possesses the capability and competence to deliver a high-quality audit in line with professional standards. Based on the above facts, answer the following:
(A) Proceed with the audit using standard checklists and procedures.
(B) Raise a concern internally and consider involving external experts or specialists.
(C) Ignore the concern as the client expects timely reporting.
(D) Delegate responsibility to junior staff familiar with manufacturing audits.

Suggested Answer and Working Notes:

Correct Answer: Option (B)

Raise a concern internally and consider involving external experts or specialists.

Topics: Standard on Auditing (SA), Quality Control

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