Week – 10

Answer:
Issues Audit Opinion Explanation
a) Missing Vouchers of Qualified Opinion Since more than 55% of the
55% of expenses expenses are not substantiated
with vouchers / receipts,
authenticity of the expenses
booked in the financial
statement is in doubt. As an
auditor, the report should be
disclaimed saying that we
could not verify an expense to
the extent of XX value (55%
of the expenses excluding
salary and allowance) due to
lack of evidence in the form
of receipt or voucher.
b) Suspected Disclaimer of Opinion The difference in valuation
Overvaluation of the method and cost allocation
unsold properties method may arise during
review. The auditor can
disclaim saying what
valuation method followed
for the purpose of valuation
of unsold unit of houses and
management assertion on its
valuation..
c) Misstatement in the Unqualified Audit opinion Since the overstatement /
financial report with emphasis of matter misstatement of $6 million is
amounting to $6 paragraph. within the materiality set for
million. the audit, an auditor cannot
qualify the report. Thus,
giving unqualified report with
emphasis on the fact that the
value of Gold coast was
overstated to the tune of $6
million giving reference to
the applicable method of
valuation adopted by the
auditor as per IFRS / US
GAAP.
d) Subsequent event loss Unqualified Audit Opinion Information about
detected due to with other matter paragraph contingency liability needs to
currency fluctuation. be stated in the notes to
accounts (below Financial
statement) about possible
dispute or claim which may
arise in future from Eclipse
band due to violation of
contract terms. This is an
event occurred during the
year which will have dispute
and liability on the company
at later year through suit in
the court of law.