As the senior auditor assigned to the audit of Mayberry Company’s financial statement for the year-ended 31 December 2020. You are reviewing the financial statements and observed that current revenue reported amounted to US$ 18m and US$ 17m for the previous year. The financial report contains the following sections: Chairman’s statement in which the chairman has commented that he is pleased to report an increase in revenue of 20% this year. ii. CEO’s reviewCorporate Social Responsibility Report iv. Operating reviewFinancial Statements vi. Notes to the Financial Statements Required: What is the significance of the Chairman’s statement in the financial statements? Identify the sections that would be included in ‘other information’ in the auditor’s report. Describe the implications(s) of the section ‘other information’ in the auditor’s report as it relates to Mayberry Company. Why should the auditor refer to the Chairman’s statement in the auditor’s report? Differentiate between the FOUR (4) types of audit opinions. Explain TWO (2) reasons why the auditors would give a qualified audit opinion.

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Answered: As the senior auditor assigned to the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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As the senior auditor assigned to the audit of Mayberry Company’s financial statement for the year-ended 31 December 2020. You are reviewing the financial statements and observed that current revenue reported amounted to US$ 18m and US$ 17m for the previous year. The financial report contains the following sections:

Chairman’s statement in which the chairman has commented that he is pleased to report an increase in revenue of 20% this year. ii. CEO’s review
Corporate Social Responsibility Report iv. Operating review
Financial Statements vi. Notes to the Financial Statements

Required:

What is the significance of the Chairman’s statement in the financial statements?

Identify the sections that would be included in ‘other information’ in the auditor’s report.

Describe the implications(s) of the section ‘other information’ in the auditor’s report as it relates to Mayberry Company.

Why should the auditor refer to the Chairman’s statement in the auditor’s report?

Differentiate between the FOUR (4) types of audit opinions.

Explain TWO (2) reasons why the auditors would give a qualified audit opinion.

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