Question 6 – Audit opinions (15 marks) For each of the following four independent scenarios, indicate:...

Question 6 – Audit opinions For each of the following four independent scenarios, indicate: • the type of audit opinion you would express in your audit report; • the reason(s) supporting your choice of opinion; and • which ASA (number is sufficient) most influences your choice. (a) Slocum Limited has changed its method of valuing closing inventory for the current financial reporting period from first-in-first out to weighted average. Inventory is a material proportion of Total Assets for Slocum Limited and the effect of the change has been a material increase in the year-end value of inventory. Those charged with governance have signed-off the change and disclosed the reason as a truer reflection of net income (profit) by better matching revenue and costs. As an auditor you have had extended discussions on the issue with the audit committee and are satisfied with the disclosures. Type of opinion: Reason(s): Supporting ASA number: (b) Joshua Pty. Ltd. is a long-time large proprietary company client of your practice, operating a charter fleet of houseboats. For the current financial reporting period, a new financial director has convinced the Board, to change the method of determining the useful lives of the company’s fleet of houseboats – the most material asset on their balance sheet. The effect has been a material reduction of the depreciation expense and consequent impact on the net income (profit) for the period. In your professional opinion the change is not justified, however, you have been unable to convince Those Charged with Governance. The change has been adequately disclosed in accordance with AASB 108. Type of opinion: Reason(s): Supporting ASA number: (c) Helping Hand is a not-for-profit providing support for the disadvantaged in your local region. As part of your professional firm’s corporate social responsibility obligations, they provide pro-bono audit services to Helping Hand. Your audit documentation shows sufficient and appropriate audit evidence has been obtained for material financial statement items with the exception of a portion of the revenue account. Approximately 40% of Helping Hand’s revenue is raised by soliciting door-to-door cash contributions by volunteers, several times during the year. Your evidence supports the effective operation of internal controls over cash once it is received at headquarters. Type of opinion: Reason(s): Supporting ASA number: (d) Pillager Limited is a retail audit client. A global pandemic has seen a dramatic decline in their trading activity for the current financial reporting period. They have been fortunate to be able to mitigate the impact to some extent by adopting some trading activity to their currently developing online platform and taking advantage of government support programs. The resulting cash flow difficulties have required successful renegotiation of an already fully drawn borrowing facility with their bank. Those charged with governance are adamant company remains viable and have also drawn up contingency plans for capital expenditure cutbacks, additional off-balance sheet finance options & further options for re-scheduling current borrowing obligations. All these details have been disclosed in a going concern note included with Significant Accounting Policies in their annual financial report. Your review of this key audit matter led you to conclude the going concern assumptions of management are sound. Type of opinion: Reason(s): Supporting ASA number:

Expert Solution

Hi Dear Respected student I'm glad to answer such a nice question for you. I hope it helps. I tried my best to provide you with a quality answer with you . I tried to utilize my full time and knowledge for this. Its quite easy and simple I believe that you will understand this in one read. Yes you can do this. Please carefully go through answer till last word. And oh yes I appreciate your hunger of grabbing knowledge keep it always up like this.

So here is your answer :

Please Feel free to ask you doubts if any. Your suggestions are most welcomed. To improve our work quality.
Please appreciate my hardwork by upvote/thumbs it will be really helpful .
Thanks for your valuable time.
Thanks for choosing this platform. All the best for your future and career. Keep learning like this always. Stay safe stay healthy. Take a good care of yourself and family . Have a great life ahead

Thanks you so much:)

genius_generous answered 2 years ago

You are the audit partner in each of the following independent and material scenarios. The audit...

You are the audit partner in each of the following independent and material scenarios. The audit client’s financing arrangements are about to expire, and the firm has not as yet been able to secure replacement financing. If they are unsuccessful in arranging replacement financing the client firm may have to consider filing for bankruptcy. After evaluating the audit client’s situation, you believe that the going concern assumption may no longer be appropriate. You have advised the client that they should...

Question 6 - Week 11 (11 marks) Consider each of the following independent situations which have...

Question 6 - Week 11 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...

Question 4 (15 marks) Consider each of the following independent and material situations, identified below (i-vi)....

Question 4 Consider each of the following independent and material situations, identified below (i-vi). In each case: the balance date is 30 June 2020; the field work was completed on 12 August 2020; the Directors’ Declaration and the Audit report were signed on 20 August 2020; the completed financial report accompanied by the signed Audit report were mailed to the shareholders on 26 August 2020. On 26 September 2020, you discovered that a debtor at 30 June 2020 had gone...

Question 6 Question 2 Part (i) 6 marks You are working on the audit of Chip...

Question 6 Question 2 Part (i) 6 marks You are working on the audit of Chip Ltd and have completed your review of controls over cash receipts. You have noted the following controls: Control 1: Handling of cash is entirely separate from the accounting department. Control 2: Before the accounting department posts sales invoices to the accounts receivable master file, cash receipts are matched to specific sales invoices. Control 3: The accounting department has a procedure whereby all recorded cash...

Question No 3: (10 Marks) “The role of internal audit is to provide independent assurance that...

Question No 3: “The role of internal audit is to provide independent assurance that an organisation's risk management, governance and internal control processes are operating effectively” On the light of the above statement, explain what features of an internal audit department would enable the external auditor to trust on the work done by the internal auditing department? Use your own views and response to question. (300 words)

For each of the following specific audit procedures, indicate the type of audit evidence it is...

For each of the following specific audit procedures, indicate the type of audit evidence it is gathering: (1) inspection of records or documents, (2) inspection of tangible assets, (3) observation, (4) inquiry, (5) confirmation, (6) recalculation, (7) reperformance, (8) analytical procedures, and (9) scanning. The audit evidences can be used more than once. a. Discussing the recording of sales discounts in the fourth quarter with the accounts receivable manager. b. Examining sales invoices for supporting customer order and shipping documents....

Question 1 (20 Marks) Each of the following independent cases describes a situation with a proposed...

Question 1 Each of the following independent cases describes a situation with a proposed tax treatment. For each case indicate whether the treatment is correct, justify your conclusion. Case A: In 1980, Brenda Carter bought a 400-acre parcel of land for $ 300,000. She was going to build a home on the property. However, in 2017, she received an offer of $ 800,000 for 150 acres of the property. Because these 150 acres of land were waterfront and had better road...

In the following chart, fill in the missing cells for each of the following independent scenarios....

In the following chart, fill in the missing cells for each of the following independent scenarios. Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number, except for the CM Ratio. Round the CM Ratio to 2 decimal places. Scenario Revenue Variable Costs Fixed Costs Total Costs Operating Income CM Ratio Contribution Margin 1 $610 $Answer $490 $630 $-20 Answer% $Answer 2 $1,800 $Answer $Answer $1,600 $Answer 55.00% $Answer 3 $Answer...

For this assignment, in each of the following five scenarios, indicate whether you consider the following...

For this assignment, in each of the following five scenarios, indicate whether you consider the following individual's behavior to be normal or abnormal. After deciding if the individual's behavior is normal or abnormal, defend your response by referencing the "4 D's" 1) A person drinks approximately three beers and three shots of liquor per day and sometimes has trouble remembering daily events in his life. 2) You see your neighbor trim his hedges with a pair of scissors and scrub...

For each of the following scenarios indicate whether they are an example of Newton's First Law...

For each of the following scenarios indicate whether they are an example of Newton's First Law or Netwon's Second Law and justify your choice. 1. A car travels down a staright highway at a constant velocity. 2. A bus driver suddenly hits the brakes. Passengers who were standing continue to move to the front of the bus and fall over each other. 3. A driver increases speed to pass another on the highway. 4. A comet moving through space suddenly...

Question