audit opinion, pls help

2009-05-24 4:32 am

(1) four weeks after the year-end, a customer of Downey Ltd goes into liquidation. Because the customer confirmed the balance due as at balance date, management refused to write off the balance or disclose the information. The balance represents 20% of accounts receivable and 20% of operating profit

(2) Upley Ltd’s financial statements disclose a net asset position of $1250000 and a profit of $1000000. The notes to the accounts disclose all facts relating to a legal claim lodged against the firm for $700000. The directors have not recognized a liability in the statement of financial position. Legal advice notes the case could go either way and is due to go to court early next year.

(3) The auditors of Sidely Ltd are refused permission to review the minutes of directors meetings due to confidentiality concerns. However the directors are happy to give the auditors certified copies of all resolutions and actions relating to accounting matters.

(4) The auditors of Backways Ltd were not appointed until after the year-end. Hence they were not able to verify the existence of physical inventory at the balance sheet date, by attending the year-end stocktake. By using alternative procedures, attending a subsequent stocktake and checking movements in the “roll-back” period, they are satisfied as to existence of stock.

is my answer correct? if not, pls explain , thx
(1) unqulaified with emphasisi of matter. as the liquidation occur after balance date, the amount in this year balance is accuracy. so, no need to adjust
(2) unqualified with emplasis of matter. as the legal claim is material. but, still not have evidence for the actural amount.
(3) unqualified. as certified copies of all resolutions and actions relating to acccounting matter is enough to give a evidence for accuracy
(4) unqualified. as the auditor are satisfied to existence of stock

更新1:

is any case need emphasis of matter?

回答 (1)

nitwell

2009-05-31 10:23 am

✔ 最佳答案

I am not agree with your answer in 1 and 3:

In regarding to the 1, auditor is aware a liquidation case of a customer of client. If the customer is under shareholders voluntary winding-up, I will agree your conclusion. However, if the customer is under winding up by court order, it means the customers is insolvency. The valuation assertion is unable to verify although the confirmation has been received. I believe that confirmation is unable to be satisfy by auditors as evidence of valuation assertion. In addition, although the winding up order was issued after the balance sheet date but in fact it affect the ability of the company to receive the whold amount of debts. The auditor should qualified the limitation of scope in this respect instead of emphasis the fundamental uncertainty.

In regarding to 3, you should know that auditors have power under the Companies Ordinance to access at all times to the books, accounts, and vouchers of the company and is entitled to require information and explanations from officers of the company as necessary for the performance of his duties (s 141(5) of CO).

According to HKSA 200 &quot;Objectives and General Principles Governing an audit of financial statements&quot;, auditors should plan and perform an audit with an attitude of professional skepticism recognizing that circumstances may exist that caurse the financial statements to be material misstated.

2009-05-31 02:26:14 補充：
If you accept certifed copies of resolution of directors, then everything can be certified by the directors. You are appointed by the shareholders to act as a watchdog of what director's did.

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