Jon Simon and Co has been engaged to perform an audit for High Trendy Sdn Bhd for the year ended 31 December 20xx. While finalizing the audit, you noted that the net profit s MYR 350,000 in the directors' report compared with MYR 500,000 in the Statement of Comprehensive Income. Based on your discussion with the management, you find out that the difference is due to an adjustment to inventory that had not been reflected in the draft financial statements. After reviewing the inventory adjustment, you have made the ocessary adjustments. However, the directors refuse to amend the financial statements to reflect the adjustment. Required: Discuss the type of audit opinion and draft an auditor's report to accompany the above situation.
Jon Simon and Co has been engaged to perform an audit for High Trendy Sdn Bhd for the year ended 31 December 20xx. While finalizing the audit, you noted that the net profit s MYR 350,000 in the directors' report compared with MYR 500,000 in the Statement of Comprehensive Income. Based on your discussion with the management, you find out that the difference is due to an adjustment to inventory that had not been reflected in the draft financial statements. After reviewing the inventory adjustment, you have made the ocessary adjustments. However, the directors refuse to amend the financial statements to reflect the adjustment. Required: Discuss the type of audit opinion and draft an auditor's report to accompany the above situation.
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter16: Advanced Topics Concerning Complex Auditing Judgments
Section: Chapter Questions
Problem 39RSCQ
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Transcribed Image Text:necessary adjustments. However, the directors refuse to amend the financial statements to
that the difference is due to an adjustment to inventory that had not been reflected in the
of Comprehensive Income. Based on your discussion with the management, you find out
is MYR 350,000 in the directors' report compared with MYR 500,000 in the Statement
the year ended 31 December 20xx. While finalizing the audit, you noted that the net profit
Jon Simon and Co has been engaged to perform an audit for High Trendy Sdn Bhd for
CASE 15
dnft financial statements, After reviewing the inventory adjustment, you have made the
reflect the adjustment.
Required:
Discuss the type of audit opinion and draft an auditor's report to accompany the above
situation.
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