An auditor is required to state whether, in his opinion proper books of account have been kept and whether the financial statements give a true and fair view of the state of the financial affairs of the company being audited. What are the consequences, to the auditor, for giving an unqualified opinion, when he knows that there are material inaccuracies in financial statements

The consequences an auditor of giving an unqualified opinion when he knows that there are material inaccuracies in the financial statements is that he exposes himself to claims of negligence. In addition, he risks:
i) Having practising certificate withdrawn for professional misconduct
ii) Ruining the reputation of the firm
iii) Claims for damages against him by the company and other third parties
iv) Risk of criminal charges for issuing a misleading report.



Share through

Leave a Reply

Your email address will not be published.