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What if their is an immaterial inconsistency between the other info and the Financial statments,what should the auditor do?
Thanks in advance Sir
As well as there being the concept of materiality as applied to amounts, values, figures within the financial statements (quantitative materiality) there is also qualitative materiality.
Where we discover an inconsistency which is not material in monetary terms, we should bring it to the attention of the directors and they would most probably amend the other information without any discussion / argument because it’s inconsistent and immaterial.
Should they refuse (because it’s immaterial in terms of value) in my opinion this would represent a qualitatively material matter and lead to a modified report (emphasis of matter)
But it’s inconsistent with something in the financial statements. You didn’t specify which of the two documents was incorrect. But if the chairman’s report is ok yet not consistent with the financial statements (which are immaterially inconsistent) my answer still stands
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