Question

1. Assume that Oceanview’s long term debt to owner’s equity makes you believe that it cannot remain in business for much longer and that it is discussed, along with management’s plans, in Note 8 of the financial statements. Type out the paragraph you would add to the Standard Report based on this information.
2. Assume that Oceanview has recorded sales of $70,000 at the end of the period that you believe should not have been recognized until the next fiscal year. Management refuses to adjust the financial statements, so you decide to issue a qualified opinion. Type out the two paragraphs that you would add to/modify in the Standard Report based on this information.

Answer 1

Circumstance 1:

In the given circumstance, the reviewer is far fetched about the going concern presumption of the organization on examination of long haul obligation to proprietor's value. As the equivalent has been revealed in the in Note 8 of budget summaries alongside the administration's arrangement, the inspector can given an 'Accentuation of issue' passage as a piece of review report.

The passage is as per the following:

We attract consideration regarding Note 8 to the fiscal reports, which depict the vulnerability identified with coherence of the business on examination of long haul obligation to proprietor's value and the administration's arrangement in this specific circumstance. Our feeling isn't qualified as for this issue.

Circumstance 2:

In the given circumstance, the examiner needs to issue a certified supposition pass on to contradiction among him and the administration about treatment of offers of $ 70000. In this circumstance, the review report contains a Basis for Opinion passage (with the subtleties of inconsistency watched) trailed by Qualified supposition section. Premise of conclusion passage is excluded in the standard unfit report.

The passages are as per the following:

Reason for Qualified Opinion:

The organization has recorded offers of $ 70000 in the fiscal reports of the detailed period, which ought to be recorded in the following budgetary year, in this way disregarding the statement of Cutoff. As needs be, the incomes are swelled by a measure of $ 70000, which brought about increment in net benefit and investor's assets by $ 70000.

Qualified Opinion:

As we would see it and to the best of our data and as indicated by the clarifications given to us, aside from the impacts of the issue depicted in Basis for Qualified assessment section, the budget reports give the data required by the Act in the way so required and give a genuine and reasonable view in congruity with the Accounting standards by and large acknowledged:

a.On account of Statement of Financial position as on 31 December, XXXX

b.On account of Statement of Income for the period 31 December, XXXX to 31 December, XXXX

c.On account of Cash Flow proclamation, of the money streams for the year finished on that date