X Ltd is in the business of trading of industrial equipment.

X Ltd is in the business of trading of industrial equipment. The Company’s operations are based
out of India and Germany. For the purpose of hedge, the company has taken forward contracts.
The Company is Phase 1company as per the requirements of Ind AS and hence forward contracts
have been fair valued for the purpose of preparation of financial statements. The Company also
got its property, plant and equipment fair valued. The Company has shown its fair valuation
reports in respect of above items to the auditors. What should be the responsibility of the
auditors in this case?

a) The auditor may refer to the work of the valuer in his report containing an unmodified
opinion and accordingly reduce the his responsibility for the audit opinion.

b) The auditor may refer to the work of the valuer in his report for forward contracts but not for
property, plant and equipment, containing an unmodified opinion and accordingly reduce his
responsibility for the audit opinion.

c) The auditor may refer to the work of the valuer in his report for property, plant and
equipment but not for forward contracts, containing an unmodified opinion and accordingly
reduce his responsibility for the audit opinion.

d) The auditor may involve his own expert for the purpose of audit of fair valuation of forward
contracts and property, plant and equipment. But in any case, he cannot reduce his
responsibility for the audit opinion by referring to the work of the valuer in his report.