Related questions
Consider each of the following independent situations which have come to your attention. In each of the following independent and material situations assume that the client is a reporting entity and that a general-purpose financial report has been prepared and audited:
Event 1: Part of Steel Limited's operations are in South America. Recent changes of government have made it impossible for you to verify the key accounts of inventory, fixed assets and cash and related income statement balances.
Event 2: The management of Surf Limited's has refused to disclose a few, director related transactions on the grounds of commercial confidentiality. The financial controller reminds you that no other errors have been found in the financial report and states that the transactions are immaterial and therefore irrelevant to the users of the financial report.
Event 3: The annual report of Ranger Limited includes a detailed graph showing revenue for the last 10 years. You note that there are some inconsistencies between the graph and the figures in the audited financial report. Management does not want to change the graph because it would involve increased printing costs.
Event 4: Upon review of the recent history of their specialised mining equipment Minco Limited changed the service lives for
Required: For all the above separate circumstances, identify the type of audit opinion that should be issued and justify your response. Write your answer in the formatted following the
table below:
| Client | Audit Opinion | Justification |
Step by stepSolved in 2 steps
- Case Study: Compliance Challenges in an International Subsidiary Introduction: Company XYZ, headquartered in the U.S., operates internationally through subsidiaries in several countries. This case study focuses on a specific international subsidiary that engaged in unethical practices, particularly creating off-the-book accounts to facilitate bribery payments to foreign officials. The subsidiary's lack of compliance measures and internal controls raises significant concerns about its adherence to the U.S. Foreign Corrupt Practices Act (FCPA) and ethical business conduct. Background: The international subsidiary in question has implemented internal controls, but notably, it does not utilize the COSO internal controls framework and lacks a comprehensive compliance program. This omission becomes critical as the subsidiary's actions involve undisclosed payments to foreign officials, leading to potential violations of the FCPA. Violations Under the Internal Control Provisions of FCPA: Use…arrow_forwardCase Study: Auditing Dynamics - Internal vs. External Auditing In the dynamic landscape of auditing, organizations rely on both internal and external auditors to ensure financial transparency, compliance, and the overall integrity of their operations. Let's explore a hypothetical case involving a multinational corporation, ABC Corporation, to highlight the roles and distinctions between internal and external auditing. Scenario: ABC Corporation ABC Corporation, a global leader in the technology sector, has a complex financial structure with subsidiaries operating in various countries. The company decides to conduct a comprehensive audit to enhance its financial governance. Internal Auditing: The internal audit team at ABC Corporation is an integral part of the organization. Led by Chief Internal Auditor Sarah Reynolds, the team is responsible for conducting regular assessments of internal controls, risk management processes, and operational efficiency. Sarah's team works closely with…arrow_forwardA review was recently carried out of the internal control systems of Gill Plc. The audit Committee Chairman as part of his remarks said that an organisation has an effective control system in place where the management is committed to accurate financial reporting. The control process provides the organisation with the ability to carry out data analysis and information management which is required by the business and employees to effectively function. Control processes enables the organisation to achieve it's aims and objectives by focusing on activities designed to safeguard the Management of the assets before, during and after it's daily operations. He concluded that the shareholders receive a great return and transparency in financial reporting is achieved where there is an effective and efficient internal control system in place. Provide a justification for the above case study by identifying and explaining: (i) FOUR characteristics of an effective internal control system (ii) THREE…arrow_forward
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education