You have been appointed the external auditor of BOA Ltd. On 25 August 2019, you were advised by management that one of BOA’s material debtors had filed for bankruptcy. The debtor’s business had been badly affected by changes in consumer demands in recent years. The debts owed to BOA were $25 million.
You have been appointed the external auditor of BOA Ltd. On 25 August 2019, you were advised by management that one of BOA’s material debtors had filed for bankruptcy. The debtor’s business had been badly affected by changes in consumer demands in recent years. The debts owed to BOA were $25 million.
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter13: Auditing Debt, Equity, And Long-term Liabilities Requiring Management Estimates
Section: Chapter Questions
Problem 28RQSC
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![You have been appointed the external auditor of BOA Ltd. On 25 August 2019, you were advised
by management that one of BOA's material debtors had filed for bankruptcy. The debtor's business
had been badly affected by changes in consumer demands in recent years. The debts owed to BOA
were $25 million.
Additional information:
• Annual balance date: 30 June 2019
• Completion of audit fieldwork: 17 August 2019
• The signing of audit report: 23 August 2019
• Publication of financial statements: 4 September 2019
Required:
State what the auditor will either do or request Management to do. Justify your response.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3d49a1bf-def0-472f-94db-660c9693a140%2F02b2a195-2f4a-404b-9fe9-1ed00b8659c3%2Fxn9zo7_processed.png&w=3840&q=75)
Transcribed Image Text:You have been appointed the external auditor of BOA Ltd. On 25 August 2019, you were advised
by management that one of BOA's material debtors had filed for bankruptcy. The debtor's business
had been badly affected by changes in consumer demands in recent years. The debts owed to BOA
were $25 million.
Additional information:
• Annual balance date: 30 June 2019
• Completion of audit fieldwork: 17 August 2019
• The signing of audit report: 23 August 2019
• Publication of financial statements: 4 September 2019
Required:
State what the auditor will either do or request Management to do. Justify your response.
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