While completing your audit work for the 30 June 2019 audit of cider Ltd. You become...

While completing your audit work for the 30 June 2019 audit of cider Ltd. You become aware of the following material matters.

A. On 5 July, white pty Ltd a major customer of cider ltd was placed into liquidation. As white pty Ltd had confirmed the balance due to cider Ltd as at balance date, management of cider Ltd has refused to write off or provide for the white pty Ltd account in the June 30 2019 financial report. However, they are prepared to disclose this information as a note to the financial report.

B. On July 15 cider ltd entered into a new contract to supply to wine taster, a major new wine store that had setup operations in northern Queensland. The contract was similar in nature to other contracts previously negotiated with other wine stores. Management does not believe that any change to the financial report is required

C. Cider ltd has capitalised significant funds incurred in developing an improved new wine cap that allows the wine to continue to develop in the bottle. On July 20 cider ltd applied for a patent for the cap, only to discover that a competitor had lodged a similar application on 15 June. The granting of cider Ltd patent application is now in serious doubt, management do not believe any change to the financial report is required.

Questions:

A. For the first scenario state the type of audit report that you should issue and give reasons

B. For the second scenario state the type of audit report that you should issue and give reasons

C. For the third scenario state the audit report that you should issue and give reasons

Solutions

Expert Solution

ekkarill92 answered 1 year ago

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