The following statement expresses the conclusion of XYZ auditors with respect to the company’s investment in ABC. Assume that all amounts are material. What type of audit opinion should be rendered given this statement? Explain the reasoning behind your answer. XYZ’s investment in ABC, a foreign subsidiary acquired during the year and accounted for by the equity method, is carried at $120,000 on the statement of financial position as at December 31, 2015, and XYZ’s share of ABC’s net income of $20,000 is included in XYZ’s income for the year then ended. We were unable to obtain sufficient appropriate audit evidence about the carrying amount of XYZ’s investment in ABC as at December 31, 2015, and XYZ’s share of ABC’s net income for the year because we were denied access to the financial information, management, and the auditors of ABC. Consequently, we were unable to determine whether any adjustments to these amounts were necessary.
The following statement expresses the conclusion of XYZ auditors with respect to the company’s investment in ABC. Assume that all amounts are material. What type of audit opinion should be rendered given this statement? Explain the reasoning behind your answer.
XYZ’s investment in ABC, a foreign subsidiary acquired during the year and accounted for by the equity method, is carried at $120,000 on the
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