2 Under relevant ISAS, what are the auditor’s responsibility with regards Preparing an audit report (ISA 700) Subsequent…

2 Under relevant ISAS, what are the auditor’s responsibility with regards Preparing an audit report (ISA 700) Subsequent…

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Under relevant ISAS, what are the auditor’s responsibility with regards
Preparing an audit report (ISA 700)
• Subsequent events (ISA 560
. Going concern (ISA 570)
• Management representations and legislation (ISA 580)
• Emphasis of matter (ISA 706)
(Write a paragraph on each topic)
What are the implications for the auditing company who issued an
unmodified report and the company collapsed 4 months later?
31) What form (type) of modified opinion would you give to each of the
following scenarios?
a) During the course of the final audit work, our client had a major
computer failure. Year-end data could not be transmitted to the head
office and so we decided to visit the branch situated at Ayr. The night
before our intended arrival the electrical fault which caused the
computer to break down occurred again and this time started a fire
which destroyed the accounts section with all the records, computer
back-ups included.
b) Your client, Alnwelf Ltd, has many investments in animal enterprises
throughout the world. Amongst them is a private investment in an
animal welfare farm in Surrey amounting to £150,000. Although you’ve
seen this sum going out of the Bank account, no documentation has yet
been received from the organisation that you can verify. This is the only item that you haven’t checked as you managed to check everything
else.
c) The General Manager of Substop PLC has Insisted that his accountants
take into account this year the turnover arising from a 6 year hire contract
for 3 of their giant Big Hole diggers. This amounts to £700,000. The profit
figure before doing this is – well it’s actually a loss- of £254,200.
d) The accountant of Kelkos Engineering Ltd, has credited a government
grant of £8000,000 to ‘cost of sales’ in the income statement. The
grant was received on plant purchased this year which has an
estimated life of six years.
311) Select one of your decisions to 3 ) and prepare the Opinion section of
the report

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Here is my answer to your questions Preparing an audit report ISA 700 According to ISA 700 the auditors obligation with respect to writing an audit report is to develop an opinion on the financial sta
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