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Hello,
There was a question in the F4 Eng CBE exam (Qu. 27)that i don’t think the answer suggested was right. Can you please confirm this?
The question is:
An auditor’s statutory duty is to report positively their opinion as to whether the financial statements of their client show a true and fair view? But auditors are also required to report by exception certain other matters that, in the auditor’s opinion, are not satisfactory. About which one of the following matters is the auditor not required to report by exception?
Where…..”?Answer selected by open tuition as correct:
the financial statements are in agreement by the underlying records.Answer selected by me:
proper returns suitable for audit purposes have not been received from branches not visited by the auditor.Why was my option wrong?
Where proper returns suitable for audit purposes have not been received from branches not visited by the auditor, then the auditor must report that fact by exception
If proper returns suitable for audit purposes HAVE been received from branches not visited by the auditor, then no mention is made
Does that make me wrong? These double negatives are awkward aren’t they?
I could do with knowing the other options – the answer would more easily jump out at me
Hi Mike,
The other options are:
1. Information in the directors’ report is inconsistent with the financial statement.
2. Proper accounting records have not been kept.What then is the correct option from all these?
a) the financial statements are in agreement by the underlying records
b) proper returns suitable for audit purposes have not been received from branches not visited by the auditor
c) information in the directors’ report is inconsistent with the financial statement
d) proper accounting records have not been kept
OK, as predicted, the answer leaps out at me
Those last three options all contain negatives (there’s your clue!)
b) … have not been received …
c) … report is inconsistent …
d) … records have not been kept
In all three cases, if these haven’t been kept, is inconsistent, not been received, – in all these cases, the auditor must report by exception
If, on the other hand, the options had been:
a) the financial statements are in agreement by the underlying records
b) proper returns suitable for audit purposes HAVE BEEN received from branches not visited by the auditor
c) information in the directors’ report IS CONSISTENT with the financial statement
d) proper accounting records HAVE BEEN kept
then everything is hunky-dory and tickety boo and there’s nothing upon which to report by exception
OK?
OK?
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