Consider each situation independently and discuss the issues involved and describe the audit opinion that should be given if the matter remained unresolved. i. The Chairman indicated in the Annual Report that revenue increased by 100% however the audited figures in the financial statements show an increase of only 10%. Several attempts were made to have the Chairman correct the Annual Report, but all were unsuccessful. ii. The Company ceased trading on March 20, 2014. Its year end is December 31, 2013. As such the Company was not a going concern as at the year end. The financial statements were still prepared under the going concern basis. iii. The Auditor did not observe the counting of the physical inventories at year end, since that date was prior to the time they were initially engaged as auditors for the Company. Owing to the nature of the Company’s records, they were unable to satisfy themselves as to inventory quantities by other audit procedures.
Consider each situation independently and discuss the issues involved and describe the audit opinion that should be given if the matter remained unresolved.
i. The Chairman indicated in the Annual Report that revenue increased by 100% however the audited figures in the financial statements show an increase of only 10%. Several attempts were made to have the Chairman correct the Annual Report, but all were unsuccessful.
ii. The Company ceased trading on March 20, 2014. Its year end is December 31, 2013. As such the Company was not a going concern as at the year end. The financial statements were still prepared under the going concern basis.
iii. The Auditor did not observe the counting of the physical inventories at year end, since that date was prior to the time they were initially engaged as auditors for the Company. Owing to the nature of the Company’s records, they were unable to satisfy themselves as to inventory quantities by other
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