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For each of the following independent scenario, discuss the issue and describe the impact on the audit report: v. ZSZA Sdn. Bhd. has been audited by your firm for the last six years. For the past three years, their financial condition has been declining steadily. In the current year, for the first time, the current ratio is below 2:1, which is the minimum requirement specified in ZSZA's major loan agreement. You now have doubt about the ability of ŽSZA to continue in operation for the next year.

For each of the following independent scenario, discuss the issue and describe the impact on the audit report: v. ZSZA Sdn. Bhd. has been audited by your firm for the last six years. For the past three years, their financial condition has been declining steadily. In the current year, for the first time, the current ratio is below 2:1, which is the minimum requirement specified in ZSZA's major loan agreement. You now have doubt about the ability of ŽSZA to continue in operation for the next year.

FINANCIAL ACCOUNTING
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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b:

Answer for (iv)

B. For each of the following independent scenario, discuss the issue and describe the impact on the audit report: iv. ZSZA Sdn. Bhd. has been audited by your firm for the last six years. For the past three years, their financial condition has been declining steadily. In the current year, for the first time, the current ratio is below 2:1, which is the minimum requirement specified in ZSZA's major loan agreement. You now have doubt about the ability of ŻSZA to continue in operation for the next year.
Transcribed Image Text:B. For each of the following independent scenario, discuss the issue and describe the impact on the audit report: iv. ZSZA Sdn. Bhd. has been audited by your firm for the last six years. For the past three years, their financial condition has been declining steadily. In the current year, for the first time, the current ratio is below 2:1, which is the minimum requirement specified in ZSZA's major loan agreement. You now have doubt about the ability of ŻSZA to continue in operation for the next year.
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