OPSM Opticians Ltd is a producer of fashion eyewear. The audit report for the year ended 30 June 20X9 was signed on 5 August 20X9 and along with the financial report was mailed to shareholders on 10 August. Consider the following independent events. Assume that each event is material. I. On 5 July, OPSM Opticians entered into a new contract to supply eyewears to JDS, a new major department store. The contract was similar in nature to other contracts previously negotiated. II. OPSM Opticians has invested significant funds in developing a new type of unbreakable sunglass lens. On 8 July, OPSM Opticians applied for a patent for the lens, only to discover that a competitor had lodged a similar application on 20 June. The granting of Trendy Accessories’ application is now in serious doubt. III. Internal audit has uncovered a major fraud at one of OPSM Opticians branches. The fraud was perpetrated by two senior staff, acting in collusion over a number of years. The internal auditors released their report to management on 15 July, after a highly confidential investigation spanning several months. IV. One of OPSM Opticians major customers, Leisure Pty Ltd, suffered a fire on 20 July. Since Leisure Pty Ltd was uninsured, it is unlikely that their accounts receivable balance will be paid. V. On 25 July, a well-known financial planner advised his clients not to invest in OPSM Opticians due to poor long-term growth prospects. The market price for OPSM Opticians shares subsequently declined by 40%. Required: For each of the above events, state the appropriate action (if any) that the auditor would require of the client in order to issue an unqualified audit opinion. Give reasons.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
OPSM Opticians Ltd is a producer of fashion eyewear. The audit report for the year ended 30
June 20X9 was signed on 5 August 20X9 and along with the financial report was mailed to
shareholders on 10 August.
Consider the following independent events. Assume that each event is material.
I. On 5 July, OPSM Opticians entered into a new contract to supply eyewears to JDS, a new
major department store. The contract was similar in nature to other contracts previously
negotiated.
II. OPSM Opticians has invested significant funds in developing a new type of unbreakable
sunglass lens. On 8 July, OPSM Opticians applied for a patent for the lens, only to discover
that a competitor had lodged a similar application on 20 June. The granting of Trendy
Accessories’ application is now in serious doubt.
III. Internal audit has uncovered a major fraud at one of OPSM Opticians branches. The fraud
was perpetrated by two senior staff, acting in collusion over a number of years. The
internal auditors released their report to management on 15 July, after a highly
confidential investigation spanning several months.
IV. One of OPSM Opticians major customers, Leisure Pty Ltd, suffered a fire on 20 July. Since
Leisure Pty Ltd was uninsured, it is unlikely that their accounts receivable balance will be
paid.
V. On 25 July, a well-known financial planner advised his clients not to invest in OPSM
Opticians due to poor long-term growth prospects. The market price for OPSM Opticians
shares subsequently declined by 40%.
Required:
For each of the above events, state the appropriate action (if any) that the auditor would require
of the client in order to issue an unqualified audit opinion. Give reasons.
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