Question

Read the following figure given to answer the following questions:

Explain its content relating it to the standards of PCAOB/ASB in reporting audited financial statements.

Do you find all the elements as you have learnt, or do you find any difference?if yes bring out the differences.

What is your opinion about the going concern according to the report?

Auditors' Report to the sharehoders

Scope of aduit:

We have aduited the accompanying consolidated balance sheet of x industries corporation and its subsudaries (the "Group") as at 31 December 2016 and the related consoildated statments of income, cash flows and shareholders' equity forr the Group's management and have been prepared by them in accordance with the requirememtns of the regulations for companies and submitted to us together with all the infromation and explanations which we required. Our responsibility is to express an opinion on these consolidated financial statments based on our aduit.

We conducted our audit in accordance with auditing standards generally accepted in the country. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statments are free of material misstatment. An audit includes examing, on a test basis, evidence supporting the amounts and disclosures in the financial statments. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluting the overall financial statment presentation. We believe theat our audit provides is reasonable degree of assurnace to enable us to express an opinion on the consolidated financial statment.

Unqualified opinion

In our opinion, the consolidated financial statment taken as a whole:

- present fairly, in all material respects, the onsolidated financial position of the Group as at 31 Decmber 2016 and the results of its operations and its cash flows for the year then ended in accordance with accounting standards generally accepted in the country.

- comply with the requirements of the requlations for companies and industries by laws in so far as they aggect the prepatation and presentation of the consolidated financial statments.

Answer 1

1. As per Standard of Auditing The auditor is required to issue a report on audit mentioning his findings during the course of Auddit and his opinion regarding the financial statements, management of the enterprise, controls existing within the enterprise,etc.

As per the AAS 28, the audit report should contain the following basic elements in it:

1. Title of the Report.
2. Addressee.
3. Opening or Introductory Paragraph.
4. Scope Paragraph.
5. Opinion Paragraph.
6. Signature.
7. Place of Signature.
8. Date of the Report.

Elements missing are-Place of Signature,Date of Audit Report,Name of the Auditor who conducted audit

Element of Going Concern is not reported in the above given audit report which is an essential element to be included. Going concern highlights that whether the eneterentewould continue in the near future or it would close down its operations. Hence a very major element as per SA 570 (Going Concern) is missing