文本第13部分报告

ReportonthefinancialWehaveauditedthefinancialstatementsof,whichcomprisethestatementoffinancialpositionasat31December20X1,andstatementofprofitorlossandother ome,statementofchangesinequityandstatementofcashflowsfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexnatoryManagement'sresponsibilityforthefinancialManagementisresponsibleforthepreparationandfairpresentationofthesefinancialstatementsinaccordancewithInternationalFinancialReportingStandards,andforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethepreparationoffinancialstatementsthatare materialmisstatement,whetherdueto orerror.Auditor'sOurresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithInternationalStandardsonAuditing.Thosestandardsrequirethatwecomplywithethicalrequirementsandnandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsare frommaterialAnauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor'sjudgement, ludingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetoorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheentity'spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity'sinternalcontrol.Anauditalso ludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialWebelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.Inouropinionthefinancialstatementspresentfairly,inallmaterialrespects,(orgiveatrueandfairviewof)thefinancialpositionofABCasat31December20X1,and(of)itsfinancialperformanceanditscashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards.Reportonotherlegalandregulatory[Formandcontentofthissectionoftheauditor'sreportwillvarydependingonthenatureoftheauditor'sotherreporting[Auditor’s[Dateoftheauditor’sreport][Auditor’saddress]You’reaThanksforstayingwithus.Youhavefinishedthis-ModifiedReportbutunmodified-ModifiedReportbutunmodifiedAnemphasisofmatterparagraphisaparagraph intheauditor’sreport.Itreferstoa:Matppropriaypresentedordisclosedinthefinancialstatements;butthatIntheauditor’sjudgement,isofsuchimportancethatitisfundamentaltousers’understandingofthefinancial AnuncertaintyrelatingtothefutureoutcomeofexceptionallitigationorregulatoryactionAmajorcatastrophethathashad,orcontinuestohave,asignificanteffectontheentity’sfinancialpositionWhereanemphasisofmatterparagraphisItcomes yaftertheopinionItisentitled‘EmphasisofTheparagraphmakesaclearreferencetothematterbeingemphasisedandwhereTherelevantdisclosuresareinthefinancialstatementsTheparagraphmuststatethattheauditor’sopinionisnotmodifiedinrespectofthematteremphasisedEmphasisofWedrawattentiontoNoteXtothefinancialstatementswhichdescribestheuncertaintyrelatedtotheoutcomeofthelawsuitfiledthe b.Ouropinionisnotqualifiedinrespectofthismatter.OthermatterAnothermatterparagraphisaparagraph ludedintheauditor’sreportthatreferstoamatterotherthanthosepresentedordisclosedinthefinancialstatements(outsidethescopeofthefinancialstatements)that,intheauditor'sjudgement,isrelevanttousers’understandingoftheaudit,theauditor’sresponsibilitiesortheauditor’sreport.ExamplesludethesituationwheretheChairman’sReportisnotconsistentwiththefinancialstatementsortheprioryearfigureshavenotbeenaudited.You’reaThanksforstayingwithus.YouhavefinishedthisISA705Modificationstotheopinioninthe tauditor’sreport-ModifiedReport(modifiedTheauditorwillgiveamodifiedauditreportTheauditorconcludes,basedontheevidenceobtained,thatthefinancialstatementsasawholearenot frommaterialmisstatement;orTheauditorisunabletoobtainsufficientappropriateauditevidencetoconcludethatthefinancialstatementsasawholeare materialmisstatement.two‘level’sofmodifiedMaterialbutnotpervasivewherethecircumstancespromptingthemisstatementarematerialMaterialandpervasivewherethefinancialstatementscouldbemis-ApervasiveopinionmeanseitherItisnotpossiblefortheauditorstoprovideanopiniononthefinancialstatements;orThereisafundamentaldisagreementbetweenthemselvesandmanagementovertheaccountingtreatmentordisclosures.TypesofmodifiedNatureofMaterialandmateriallymisstatedQUALIFIEDADVERSEAuditorunabletoobtainsufficientappropriateauditevidenceQUALIFIEDYou’reaThanksforstayingwithus.YouhavefinishedthisEX1qualified-MaterialmisstatementscouldariseinrespectTheappropriatenessofselectedaccountingTheapplicationofselectedaccountingTheappropriatenessoradequacyofdisclosuresinthefinancialBasisforQualified ’sinventoriesarecarriedinthestatementoffinancialpositionatxxx.Managementhasnotstatedinventoriesatthelowerofcost realisablevaluebuthasstatedthemsolelyatcost,whichconstitutesadeparturefromInternationalFinancialReportingStandards. ’srecordsindicatethathadmanagementstatedtheinventoriesatthelowerofcostan realisablevalue,anamountofxxxwouldhavebeenrequiredtowritetheinventoriesdowntotheirealisablevalue.Accordingly,costofsaleswouldhavebeen reasedbyxxx,and ometaxomeandshareholders’equitywouldhavebeenreducedbyxxx,xxxandxxx,respectively.QualifiedInouropinion,exceptfortheeffectsofthematterdescribedintheBasisforQualifiedOpinionparagraph,thefinancialstatementspresentfairly,inallmaterialrespects,(orgiveatrueandfairviewof)thefinancialpositionofABCasat31December20X1,and(of)itsfinancialperformanceanditscashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards.YouaretheauditmanagerofXXandyouarecurrentlyreviewingtheauditfilesforseveralofyour sforwhichtheauditfieldworkiscomplete.Theaudi iorshaveraisedthefollowingissues:Foreachof sDiscusstheissue, ludinganassessmentofwhetheritismaterial;and(4marks)Describetheimpactontheauditreportiftheissueremainsunresolved.(4marks)CzechCzechCoisapharmaceutical andhas researchexpenditureof$21manddevelopmentexpenditureof$32mduringtheyear,thishasallbeencapitalisedasanintangibleasset.Profitbeforetaxis$263mCzechCohas urredresearchexpenditureof$21manddevelopmentexpenditureof$32mandthishasallbeencapitalisedwithinintangibleassets.ThisiscontrarytoIAS38IntangibleAssets,asresearchexpenditureshouldbeexpensedtoprofitorlossaccountratherthancapitalised.(21m/263m)andhencemanagementshouldadjustthefinancialstatementsbyremovingtheresearchexpenditurefromintangiblesandchargingittoprofitorlossaccountinstead.Ifmanagementrefusetoamendthiserrorthentheauditreportwillneedtobemodified.AsmanagementhasnotcompliedwithIAS38andtheerrorismaterialbutnotpervasivethenaqualifiedopinionwouldbenecessary.Thebasisofopinionparagraphwouldneedtoludeaparagraphexiningthematerialmisstatementinrelationtotheprovisionofdepreciationonlandandtheeffectonthefinancialstatements.Theopinionparagraphwouldbequalified‘exceptfor’.Ex2AdverseopinionduetomaterialmisstatementwithapervasiveeffectBasisforAdverseAinedinNoteX,the ludedhousesbuiltforre-sale( ludingrelatedland) ostof$Xasnon-currentassetsanddepreciatedthematarateofX%,resultingindepreciationof$X.UnderInternationalFinancialReportingStandards,theseshouldhavebeen ludedasinventoryinthefinancialstatementsandnodepreciationshouldhavebeenprovidedinrespectofthese.Thecarryingvalueofthehousesrepresent90%ofthe ’stotalassetsandthe recordsindicatethat…[exnationoftheeffectonamountspresentedinthefinancialstatements].AdverseopinionduetomaterialmisstatementwithapervasiveeffectAdverseInouropinion,becauseofthesignificanceofthematterdiscussedintheBasisforAdverseOpinionparagraph,thefinancialstatementsdonotpresentfairly(ordonotgiveatrueandfairviewof)thefinancialpositionofABCasat31December20X1,and(of)itsfinancialperformanceanditscashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards.FuchsiaEnterprisesCoFuchsiaha perienceddifficulttradingconditionsandasaresultithaslostsignificantmarketshare.Thecashflowforecasthasbeenreviewedduringtheauditfieldworkanditshowsasignifican cashoutflow.Managementareconfidentthatfurtherfundingcanbeobtainedandsohavepreparedthefinancialstatementsonagoingconcernbasiswithnoadditionaldisclosures;theaudi iorishighlyscepticalaboutthis.Theprioryearfinancialstatementsshowedaprofitbeforetaxof$12m;however,thecurrentyearlossbeforetaxis$44mandtheforecas cashoutflowforthenext12monthsis$32m.Fuchsiaisfacinggoingconcernproblemsasithasexperienceddifficulttradingconditionsandithasanegativecashoutflow.However,thefinancialstatementshavebeenpreparedonagoingconcernbasis,eventhoughitispossiblethatthe isnotagoingconcern.Theprioryearfinancialstatementsshowedaprofitof$12mandthecurrentfinancialstatementsshowalossbeforetax$44m,$32mthisloss(32/44m)andhenceisamaterialissue.Ifmanagementrefusetoamendthegoingconcernbasisofthefinancialstatementsorattheveryleastmakeadequategoingconcerndisclosures,thentheauditreportwillneedtobemodified.Asthegoingconcernbasisisprobably orrectandtheerrorismaterialandpervasive,thenanadverseopinionwouldbeAbasisforadverseopinionparagraphwillberequiredtoexintheinappropriateuseofthegoingconcernassumption.Theopinionparagraphwillbeanadverseopinionandwillstatethatthefinancialstatementsdonotgiveatrueandfairview.Ex3qualified-limitationonQualifiedopinion–auditorunabletoobtainsufficientappropriateauditevidenceTheauditor’sinabilitytoobtainsufficientappropriateauditevidencecouldarisefrom:Circumstancesbeyondtheentity’scontrol(e.g.accountingrecordsdestroyed)Circumstancesrelatingtothenatureortimingoftheauditor’swork(e.g.thetimingoftheauditor’sappointmentpreventstheobservationofthephysicalinventorycount)Limitationsimposedbymanagement(e.g.managementpreventstheauditorfromrequestingexternalconfirmationofspecificaccountbalances)BasisforQualifiedWithrespecttoinventoryhavingacarryingamountof$Xtheauditevidenceavailabletouswaslimitedbecausewedidnotobservethecountingofthephysicalinventoryasat31December20X1,s ethatdatewaspriortoourappointmentasauditorofthe Owingtothenatureofthe ’srecords,wewereunabletoobtainsufficientappropriateauditevidenceregardingtheinventoriestiesbyusingotherauditprocedures.QualifiedInouropinion,exceptforthepossibleeffectsofthematterdescribedintheBasisforQualifiedOpinionparagraph,thefinancialstatementspresentfairly,inallmaterialrespects,(orgiveatrueandfairviewof)thefinancialpositionofABCasat31December20X1,and(of)itsfinancialperformanceanditscashflowsfortheyearthenendedinaccordancewithInternationalFinancialReportingStandards.DawsonDawsonCo’scomputerisedwagesprogramisbackeddaily,howeverforaperiodoftwomonthsthewagesrecordsandtheback-upshavebeencorrupted,andthereforecannotbeaccessed.Wagesandsalariesforthesetwomonthsare$11m.ProfitbeforetaxisDawsonCo’swagesprogramhasbeencorruptedleadingtoalossofpayrolldataforaperiodoftwomonths.Theauditorsshouldattempttoverifypayrollin ternativemanner.Iftheyareunabletodothisthenpayrollforthewholeyearwouldnothavebeenverified.Wagesandsalariesforthetwomonthperiodrepresents11%ofprofitbeforetax(11m/10m)andthereforeisamaterialbalanceforwhichauditevidencehasnotbeenavailable.Theauditorswillneedtomodifytheauditreportastheyareunabletoobtainsufficientappropriateevidenceinrelationtoamaterial,butnotpervasive,elementofwagesandsalariesandthereforeaqualifiedopinionwillberequired.Thebasisofopinionsectionwillbeamendedtoexinthelimitationinrelationtothelackofevidenceovertwomonthsofpayrollrecords.Theopinionparagraphwillbequalified‘exceptfor’.Ex4 Dierofopinion-auditorunabletoobtainsufficientappropriateauditevidenceAnopinionmustbe edwhentheCannotobtainsufficientappropriateauditevidenceonwhichtobasetheopinionandConcludesthatthepossibleeffectsonthefinancialstatementsofundetectedmisstatements,ifany,couldbebothmaterialandTheopinionmustalsobedi edinsituationsinvolvingmultipleuncertaintieswhenitisnotpossibletoformanopiniononthefinancialstatementsduetothepotentialin ctionoftheuncertaintiesandtheirpossiblecumulativeeffectonthefinancialBasisfor erofWewerenotappointedasauditorsofthe untilafter31December20X1andthusdidnotobservethecountingofphysicalinventoriesatthebeginningandendoftheyear.Wewereunabletosatisfyourselvesbyalternativemeansconcerningtheinventorytiesheldat31December20X0and20X1whicharestatedinthestatementoffinancialpositionatxxxandxxx,respectively.Inaddition,theintroductionofanewcomputerisedaccountsreceivablesysteminSeptember20X1resultedinnumerouserrorsinaccountsreceivable.Asofthedateofourauditreport,managementwasstillintheprocessofrectifyingthesystemdeficienciesandcorrectingtheerrors.Wewereunabletoconfirmorverifybyalternativemeansaccountsreceivable ludedinthestatementoffinancialpositionatatotalamountofxxxasat31December20X1.Asaresultofthesematters,wewereunabletodeterminewhetheranyadjustmentsmighthavebeenfoundnecessaryinrespectofrecordedorunrecordedinventoriesandaccountsreceivable,andtheelementsmakingupthe omestatement,statementofchangesinequityandstatementofcashflows. erofBecauseofthesignificanceofthemattersdescribedintheBasisfor erofOpinionparagraph,wehavenotbeenabletoobtainsufficientappropriateauditevidencetoprovideabasisforanauditopinion.Accordingly,wedonotexpressanopiniononthefinancialstatements.DaisyDesignsCoDaisy’syearendis30September,however,subsequenttotheyearendthe ’ssalesledgerhasbeencorruptedbyacomputer.Daisy’sfinancedirectorwasabletoproducethefinancialstatementspriortothisoccurring;however,theauditteamhasbeenunabletoaccessthesalesledgertoundertakedetailedtestingofrevenueoryear-endreceivables.Allotheraccountingrecordsareunaffectedandtherearenobackupsavailableforthesalesledger.$156m,$34mbeforetaxis$2m.Daisy’ssalesledgerhasbeencorruptedbyacomputer hencenodetailedtestinghasbeenperformedonrevenueandreceivables.Theauditteamwillneedtoseeiftheycanconfirmrevenueandreceivablesin ternativemanner.Iftheyareunabletodothis,thentwosignificantbalancesinthefinancialstatementswillnothavebeenconfirmed.Revenueandreceivablesarebothhigherthanthetotalprofitbeforetax(PBT)of$2m;receivablesare170%ofPBTandrevenueisnearlyeighttimesthePBT;hencethisisaverymaterialissue.Theauditorswillneedtomodifytheauditreportastheyareunabletoobtainsufficientappropriateevidenceinrelationtotwomaterialandpervasiveareas,beingreceivablesandrevenue.Thereforeadi erofopinionwillberequired.Abasisfordi erofopinionparagraphwillberequiredtoexinthelimitationinrelationtothelackofevidenceoverrevenueandreceivables.Theopinionparagraphwillbeadi erofopinionandwillstatethatweareunabletoformanopiniononthefinancialstatements.Ex5EmphasisMinnieMinnieCo’sma ompetitorhasfiledalawsuitfor$5mthemallegingabreachofcopyright;thiscaseisongoingandwillnotberesolvedpriortotheauditreportbeingsigned.Thematteriscorrectlydisclosedasacontingentliability.Profitbeforetaxis$10m. isbeingsuedbyacompetitorforbreachofcopyright.ThismatterhasbeencorrectlydisclosedinaccordancewithIAS37Provisions,ContingentLiabilitiesandContingentAssets.Thelawsuitisfor$5mwhichrepresents50%ofprofitbeforetax(50m/10m)andhenceisamaterialmatter.Thisisanimportantmatterwhichneedstobebroughttotheattentionoftheusers.Asthethematteriscorrectlydisclosed,theauditreportshouldalsobewithaunqualifiedopinionbutaddedaemphasisparagraphtodrawattentionoftheusertothismatter.Anemphasisofmatterparagraphshouldbeinsertedaftertheopinionparagraph,theparagraphwouldexlearlyaboutthelawsuitandcrossreferencestowhereinthefinancialstatementsthedisclosureofthiscontingentliabilitycanbeModificationofaudit-goingGoingconcernisinIfthe discloseditproperly,theauditreportshouldbemodifiedwithanemphasisofmatterparagraphtodrawattentiontothedisclosureofthenoteontheuncertaintyofGCinthefinancialAnemphasisofmatterparagraphshouldbeinsertedaftertheopinionparagraph,theparagraphwouldexlearlyabouttheeffectoftheuncertaintyofGCandcrossreferencestowhereinthefinancialstatementsthedisclosurecanbefound.GoingconcernisinIfthe didn'tdiscloseitproperly,theauditreportshouldbemodifiedwithaqualifiedopinion(disagreement).Abasisforqualifiedopinionparagraphwouldneedtobeludedexiningthedisagreementinrelationtotheuncertaintyofgoingconcern.Theopinionparagraphwouldbequalified‘exceptfor’–duetomaterialmisstatement.GoingconcernisIfthe re-preparedthefinancialstatementperappropriatebasis(break-upbasis),theauditreportshouldbemodifiedwithanemphasisofmatterparagraphtodrawattentiontothedisclosureofthenoteontheassumptionthefinancialstatements.Anemphasisofmatterparagraphshouldbeinsertedaftertheopinionparagraph,theparagraphwouldexinassumptionofthefinancialstatementandcrossreferencestowhereinthefinancialstatementsthedisclosurecanbefound.GoingconcernisIfthe stillusedthegoingconcernassumptiontopreparethefinancialstatement,theauditreportshouldbemodifiedwithanadverseAbasisforadverseopinionparagraphwouldneedtobe exiningthedisagreementinrelationtotheappropriatenessofgoingconcern.Theopinionparagraphwouldbemodified‘donot’–duetomaterialandpervasivemisstatement.Test7CompletionandReportAspartofthereviewstageofanaudit,theauditorwillconsidersubsequentevents.Uptowhichdatedoestheauditorhaveanactiveresponsibilitytoperformproceduresdesignedtoidentifysubsequentevents?ThereportingThedateoftheauditor'sThedateofissueofthefinancialThedateofapprovalofthefinancialWhichofthefollowingprocedureswillbeperformedbytheauditoraspartofasubsequenteventsreview?RequestforwrittenrepresentationsfromReviewofminutesofboardmeetingsheldafterthedateofthefinancialstatements(1)(2)(1)andNeither(1)norIsthefollowingstatementregardingthepurposeofsubsequenteventstrueorfalse?Thepurposeofthesubsequenteventsreviewperformedbytheauditoristoensurethattheeffectsofallsubsequenteventsidentifiedarereflectedinthefinancialstatements.Isthefollowingstatementregardingthegoingconcernassumptiontrueorfalse?Underthegoingconcernassumptionitisassumedthatthebusinesswillneverhavecausetoceasetrading.Isthefollowingstatementregardingtheauditor'sresponsibilitiesregardinggoingconcerntrueorfalse?Itistheauditor'sresponsibilitytoassessanentity'sabilitytocontinueasagoingconcern.MCohasayearendof31December20X4.Theauditorhasidentifiedthatmanagement'sassessmentofMCo'sabilitytocontinueasagoingconcerncoverstheperiodto30June20X5.WhtionshouldtheauditorRequestthatmanagementextendstheassessmentperiodto30SeptemberRequestthatmanagementextendstheassessmentperiodto31DecemberRequestthatmanagementextendstheassessmentperiodto31DecemberNoactionisrequiredprovidedtheauditorissatisfiedwithmanagement'sassessmentto30June20X5ISA570Goingconcernidentifieseventsandconditionsthatmaycastdoubtaboutthegoingconcernassumption.WhichofthefollowingareidentifiedbyISA570asfinancial(1)Lossofkeycustomers(2liabilitypositionSubstantialoperatingShortagesofkeyraw(1)and B.(1)andC.(2)and D.(3)andZCohasayearendof30June20X4.Managementhasassessedtheabilityofthe tocontinueasagoingconcernbasedontheperiodto30June20X5.WhichofthefollowingproceduresmusttheauditorperformtoidentifyfactorsthatmayaffectZCo'sabilitytocontinueasagoingconcernbeyond30June20X5?ysisofcashflowReviewofboardReviewofloanInquiryofTheauditorofSCohasconcludedthattheuseofthegoingconcernassumptionisappropriateandthatthematerialuncertaintyhasbeenadequaydisclosed.WhatistheimpactofthisconclusionontheauditAdverseModifiedUnmodifiedopinionwithoutanemphasisofmatterUnmodifiedopinionwithanemphasisofmatterTheauditorofYCohasconcludedthatYCoisnotagoingconcern.Thefinancialstatementshavebeenpreparedonagoingconcernbasisandmanagementhasrefusedtochangethem.WhatformofauditopinionwillbeissuedbytheAnunmodifiedAmodifiedopinionduetomaterialAmodifiedopinionduetoinsufficientappropriateauditAnadverseTCohasayearendof31July20X4.Theauditorcompletedtheauditworkon10September20X4andtheauditor'sreportwassignedon30September20X4.Thefinancialstatementswereissuedon1NovemberWhichofthefollowingwouldbethemostappropriatedateforthedirectorstosignthewrittenrepresentationsletter?31July10September30September1NovemberIsthefollowingstatementregardingwrittenrepresentationstrueorfalse?Writtenrepresentationsbymanagementregardingspecificassertionsinthefinancialstatementsprovidesufficientappropriateauditevidenceintheirownright.Forwhichofthefollowingmattersmustwrittenrepresentationsbesought?ThatmanagementhasfulfilleditsresponsibilityforthepreparationofthefinancialstatementsThatmanagementhasprovidedtheauditorwithalltheinformationrelevanttotheaudit countsreceivableareThatinventoryiscorrectlyvaluedatthelowerofcostanrealisablevalue(1)and B.(1)and(2)and D.(3)andWhichofthefollowingstatementsregarding yticalproceduresis yticalproceduresmustbeusedaspartoftheoverallreviewofthefinancialstatements. yticalproceduresmaybeusedaspartoftheoverallreviewofthefinancialstatements.yticalproceduresareonlyusedasriskassessmentMisstatementscanarisefromerror Whichofthefollowingstatementsiscorrectregardingtheauditor'saccumulationofidentifiedmisstatements?Theauditormustaccumulateallmisstatementsidentifiedduringtheaudit.Theauditormustonlyaccumulateindividuallymaterialmisstatementsidentifiedduringtheaudit.Theauditormustaccumulatemisstatementsidentifiedduringtheaudit,otherthanthosethatareclearlytrivial.ISA700Forminganopinionandreportingonfinancialstatementssetsoutthebasicelementsofanauditor'sreport.Whichofthefollowingisnot ludedinanunmodifiedauditor'sManagement'sresponsibilityforthefinancialAuditors'AuditDeficienciesofinternalTheauditorofQCohascompletedtheauditandhasconcludedthatsufficientappropriateevidencehasbeenobtained,whichconfirmsthatthefinancialstatementsarenotmateriallyWhichformofauditopinionwilltheauditorAdverseQualifiedUnmodifiedA erofISA705Modificationtotheopinioninthetauditor'sreportidentifiesthreepossibletypesofmodification.InwhichofthefollowingcircumstanceswouldadierofopinionbeTheauditorconcludesthatthefinancialstatements whicharematerialbutnotpervasivetothefinancialstatements.Theauditorconcludesthatthefinancialstatementsludemisstatementswhicharebothmaterialandpervasivetothefinancialstatements.Theauditorhasnotbeenabletoobtainsufficientappropriateauditevidenceonwhichtobaseanopinionbuthasconcludedthatthepossibleeffectsofanyundetectedmisstatementscouldbematerialbutnotpervasive.Theauditorhasnotbeenabletoobtainsufficientappropriateauditevidenceonwhichtobaseanopinionandhasconcludedthatthepossibleeffectsofanyundetectedmisstatementscouldbebothmaterialandpervasive.TheauditorofBCohasconcludedthatinventoryisoverstatedasanumberoflineshavenotbeenvaluedatthelowerofcostanrealisablevalue.Theoverstatementismaterialbutnotpervasivetothefinancialstatements.Managementhasrefusedtomakeanadjustmenttothefinancialstatements.WhatformofmodifiedopinionshouldtheauditorAdverse erofQualifiedopinionduetoamaterialQualifiedopinionduetoinsufficientappropriateevidenceonwhichtobaseanopinionThefinancialstatementsofZ ludeareceivablesbalance$20,000whichtheauditorsdonotbelievewillberecovered.Materialityhasbeensetat$100,000.TherearenootherunadjustedWhatformofauditopinionwouldbeissuedbytheAdverseUnmodified erofQualifiedopinionduetooverstatementofPCoisbeingsuedbyacustomerforthesupplyoffaultyproducts.Attheyearendtheoutcomeofthelegalcaseisstilluncertain.Thedirectorshavefullydisclosedthemat sacontingentliabilityandtheauditorsaresatisfiedwiththetreatmentandthelevelofdisclosure.Theauditorshaveconcludedthattheuncertaintyisfundamentaltotheunderstandingofthefinancialstatements.Whatformofauditopinionwouldtheauditor UnmodifiedopinionwithanemphasisofmatterUnmodifiedopinionwithoutanemphasisofmatterQualifiedThemajorityofthebooksandrecordsofQCohavebeendestroyedbyafloodandtheauditorhasnootherrealisticmeansofobtainingsufficient,appropriateauditevidence.WhichformofopinionwilltheauditorAnadverseAdierofQualifiedopiniononthebasisthatsufficientappropriateevidenceisnotavailableUnmodifiedopinionwithanemphasisofmatterparagraphexiningthecircumstancesofthefloodThestatementoffinancialpositionofR ludesamaterialamount$200,000inrespectofcostscapitalisedintheyearasdevelopmentexpenditure.TheauditorhasconcludedthatthesecostsareresearchIftheauditoristoissueanunmodifiedopinionwhichfinancialstatementswillrequireadjustment?StatementoffinancialpositionStatementofprofitorlossStatementoffinancialpositionandstatementofprofitorNeitherthestatementoffinancialpositionnorthestatementofprofitorYou’reaThanksforstayingwithus.YouhavefinishedthisTest8CompletionandReportForwhichofthefollowingmatterswoulditbeinappropriatefortheauditortorequestawrittenrepresentation?Confirmationthatallinformationinrelationtoallegedoredaffectingthefinancialstatementshasbeendisclosedtothe nsorintentionsthatmayaffectthecarryingvalueofassetorToveritythetyofinventoryheldbythirdConfirmationthatmanagement,andthosechargedernance,havefulfilledtheirresponsibilityforthepreparationofthefinancialstatementsAspartofasubsequenteventsreview,the