Auditing and EthicsQuestion 5699 of 212
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6. In case of difference of opinion between the joint auditors, what course of action can M/s. KRISH & Co. take while issuing the audit report?

Options

AThey will have to agree with the opinion formed by the majority of auditors.
BThey will have to agree with the opinion formed by the majority auditors, but they can mention their view in the Emphasis of Matter Paragraph.
CThey can add a separate audit opinion paragraph in the common audit report.
DThey can issue a separate audit report and the audit reports issued by the joint auditors shall make a reference to each other's audit report.
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Correct Answer

✅ Option D — They can issue a separate audit report and the audit reports issued by the joint auditors shall make a reference to each other's audit report.

All Options:

  • AThey will have to agree with the opinion formed by the majority of auditors.
  • BThey will have to agree with the opinion formed by the majority auditors, but they can mention their view in the Emphasis of Matter Paragraph.
  • CThey can add a separate audit opinion paragraph in the common audit report.
  • DThey can issue a separate audit report and the audit reports issued by the joint auditors shall make a reference to each other's audit report. ✓

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Detailed Solution & Explanation

When there is a difference of opinion between joint auditors, it poses a challenge in presenting a unified audit report, as the auditors are unable to agree on the financial statements' fairness and accuracy.
In such a scenario, the joint auditors cannot simply agree with the majority opinion, as this would not accurately reflect the views of all auditors involved, making Option A incorrect.
Option B suggests that the auditors who disagree with the majority can mention their view in the Emphasis of Matter Paragraph. However, this is not the appropriate course of action when there is a fundamental difference in opinion regarding the financial statements, as it may not fully capture the extent of the disagreement.
Option C proposes adding a separate audit opinion paragraph in the common audit report. While this might seem like a way to include differing opinions, it could lead to confusion and does not fully address the issue of presenting a clear, unified audit report when opinions diverge significantly.
The most appropriate course of action, as stated in Option D, is for the joint auditors to issue separate audit reports, with each report referencing the other. This approach allows each auditor to express their independent opinion on the financial statements, providing clarity and transparency to the users of the financial statements.
This method ensures that the differences in opinion are clearly communicated, and stakeholders can consider both perspectives when making decisions based on the audit reports.
Hence, **Option D** is the correct answer.

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