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Jon Simon and Co has been engaged to perform an audit for High Trendy Sdn Bhd for the year ended 31 December 20xx. While finalizing the audit, you noted that the net profit is MYR 350,000 in the directors' report compared with MYR 500,000 in the Statement of Comprehensive Income. Based on your discussion with the management, you find out that the difference is due to an adjustment to inventory that had not been reflected in the draft financial statements, After reviewing the inventory adjustment, you have made the necessary adjustments. However, the directors refuse to amend the financial statements to reflect the adjustment. Required: Discuss the type of audit opinion and draft an auditor's report to accompany the above situation.

Jon Simon and Co has been engaged to perform an audit for High Trendy Sdn Bhd for the year ended 31 December 20xx. While finalizing the audit, you noted that the net profit is MYR 350,000 in the directors' report compared with MYR 500,000 in the Statement of Comprehensive Income. Based on your discussion with the management, you find out that the difference is due to an adjustment to inventory that had not been reflected in the draft financial statements, After reviewing the inventory adjustment, you have made the necessary adjustments. However, the directors refuse to amend the financial statements to reflect the adjustment. Required: Discuss the type of audit opinion and draft an auditor's report to accompany the above situation.

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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necessary adjustments. However, the directors refuse to amend the financial statements to draft financial statements. After reviewing the inventory adjustment, you have made the that the difference is due to an adjustment to inventory that had not been reflected in the of Comprehensive Income. Based on your discussion with the management, you find out s MYR 350,000 in the directors' report compared with MYR 500,000 in the Statement Jon Simon and Co has been engaged to perform an audit for High Trendy Sdn Bhd for the year ended 31 December 20xx. While finalizing the audit, you noted that the net profit reflect the adjustment. Required: Discuss the type of audit opinion and draft an auditor's report to accompany the above situation.
Transcribed Image Text:necessary adjustments. However, the directors refuse to amend the financial statements to draft financial statements. After reviewing the inventory adjustment, you have made the that the difference is due to an adjustment to inventory that had not been reflected in the of Comprehensive Income. Based on your discussion with the management, you find out s MYR 350,000 in the directors' report compared with MYR 500,000 in the Statement Jon Simon and Co has been engaged to perform an audit for High Trendy Sdn Bhd for the year ended 31 December 20xx. While finalizing the audit, you noted that the net profit reflect the adjustment. Required: Discuss the type of audit opinion and draft an auditor's report to accompany the above situation.
REVIEW QUESTIONS I What are the basic elements in a standard auditor's report on financial statemento 2 List three types of qualificd audit reports and briefly explain the circumstances in which each is appropriate. lead to the issuance of a qualified report. - Distinguish between a standard unqualified auditor's report and a modified unqualified auditor's report. S What is the purpose of adding an emphasis of matter paragraph to an audit repor Discuss the circumstances that may cause the auditor to include an emphasis of matter paragraph in the audit report.
Transcribed Image Text:REVIEW QUESTIONS I What are the basic elements in a standard auditor's report on financial statemento 2 List three types of qualificd audit reports and briefly explain the circumstances in which each is appropriate. lead to the issuance of a qualified report. - Distinguish between a standard unqualified auditor's report and a modified unqualified auditor's report. S What is the purpose of adding an emphasis of matter paragraph to an audit repor Discuss the circumstances that may cause the auditor to include an emphasis of matter paragraph in the audit report.
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