Oscar Wylee Women Glass Ltd is a supplier of fashion women sunglasses. The audit report for the year ended 30 June 2021 was signed on 8 August 2021, and the financial report was mailed to shareholders on 12 August. Consider the following independent events. Assume that each event is material. On 5 July, Oscar Wylee entered into a new contract to deliver sunglasses to Specsavers, a new major department store. The contract was similar to other previously contracted contracts . Oscar Wylee has financed huge funds in developing a new type of solid sunglasses lens. On 8 July, Oscar Wylee applied for a patent for the lens, only to identify that a competitor had lodged a similar application on 25 June. The granting of Oscar Wylee application is now of major concern. One of Oscar Wylee major customers, Phoenix Pty Ltd, suffered a fire on 23 July. Since Phoenix Pty Ltd was uninsured, it is unlikely that their accounts receivable balance will be paid. On 27 July, a well-known financial planner advised his clients not to invest in Oscar Wylee due to poor long-term growth prospects. The market price for Oscar Wylee Accessories' shares subsequently declined by 50% . Required: For each of the individual misstatements listed, explain auditors' responsibility and consequence auditing report.
Oscar Wylee Women Glass Ltd is a supplier of fashion women sunglasses. The audit report for the year ended 30 June 2021 was signed on 8 August 2021, and the financial report was mailed to shareholders on 12 August. Consider the following independent events. Assume that each event is material. On 5 July, Oscar Wylee entered into a new contract to deliver sunglasses to Specsavers, a new major department store. The contract was similar to other previously contracted contracts . Oscar Wylee has financed huge funds in developing a new type of solid sunglasses lens. On 8 July, Oscar Wylee applied for a patent for the lens, only to identify that a competitor had lodged a similar application on 25 June. The granting of Oscar Wylee application is now of major concern. One of Oscar Wylee major customers, Phoenix Pty Ltd, suffered a fire on 23 July. Since Phoenix Pty Ltd was uninsured, it is unlikely that their accounts receivable balance will be paid. On 27 July, a well-known financial planner advised his clients not to invest in Oscar Wylee due to poor long-term growth prospects. The market price for Oscar Wylee Accessories' shares subsequently declined by 50% . Required: For each of the individual misstatements listed, explain auditors' responsibility and consequence auditing report.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter12: Intangibles
Section: Chapter Questions
Problem 11P
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Oscar Wylee Women Glass Ltd is a supplier of fashion women sunglasses. The audit report for the year ended 30 June 2021 was signed on 8 August 2021, and the financial report was mailed to shareholders on 12 August.
Consider the following independent events. Assume that each event is material.
- On 5 July, Oscar Wylee entered into a new contract to deliver sunglasses to Specsavers, a new major department store. The contract was similar to other previously contracted contracts .
- Oscar Wylee has financed huge funds in developing a new type of solid sunglasses lens. On 8 July, Oscar Wylee applied for a patent for the lens, only to identify that a competitor had lodged a similar application on 25 June. The granting of Oscar Wylee application is now of major concern.
- One of Oscar Wylee major customers, Phoenix Pty Ltd, suffered a fire on 23 July. Since Phoenix Pty Ltd was uninsured, it is unlikely that their
accounts receivable balance will be paid. - On 27 July, a well-known financial planner advised his clients not to invest in Oscar Wylee due to poor long-term growth prospects. The market price for Oscar Wylee Accessories' shares subsequently declined by 50% .
Required:
For each of the individual misstatements listed, explain auditors' responsibility and consequence auditing report.
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