When there is a material inconsistency between the financial report and other information in the annual report, and the client refuses to change the information, the auditor should:
A) do nothing as the audit opinion is confined to the financial report.
B) include an emphasis of matter section in the audit report.
C) advise ASIC and the ASX.
D) issue a qualified opinion.

Question

Quizplus · Accepted Answer

While the audit opinion is restricted to the financial report, the auditor should still highlight the material inconsistency between the financial report and other information in the annual report. The auditor should include an emphasis of matter section in the audit report to draw attention to the matter. This will ensure that users of the report are informed about the discrepancy and can make their own judgments.

When There Is a Material Inconsistency Between the Financial Report