18. KJ Private Ltd has a business of pharmaceuticals and has an annual turnover of INR 1,500 crore. During the last few years, considering the environment in which the company operates, its profit has reduced and are still reducing. Hence, the management has been looking at various ways to cut the costs.

AD & Associates are the statutory auditors of the company and RM & Associates are the internal auditors of the company. Initially, the company did not want to appoint any internal auditors to save costs, however, at insistence of the statutory auditors, the company appointed the internal auditors.

During the course of the statutory audit for the financial year ended 31 March, 2020, the statutory auditors requested for the detailed working papers of the internal auditors which the internal auditors refused.

However, the statutory auditors told the management if the same are not provided then they would qualify their report. In this situation, please advise which of the following would be correct.

(a) The statutory auditors should review the detailed working papers but they cannot qualify their report on this ground.

(b)The statutory auditors may review the detailed working papers and even after that they may qualify their report.

(c) The statutory auditors are not required to go to the extent of review of detailed working papers of internal auditors.

(d) The statutory auditors may review the detailed working papers of internal auditors but for that purpose they would require prior approval of the ICAI.




















(c) The statutory auditors are not required to go to the extent of review of detailed working papers of internal auditors.

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