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a) completion matters to be considered in relation to the issues described

further actions to be taken

implication for the auditors report

The draft financial statements recognise revenue of $108 million (20X4: $102 million), profit before tax of $9.3
million (20X4: $8.2 million) and total assets of $150 million (20X4: $149 million). Materiality has been set at
$0.5 million.  

The finance director is at advanced level for the negotiations of the scientific devision and has not recognized in
the financil year stating that sale would affect in the next year wich is incorrect.

The revenue of Myron is $13 m, PBT is $1.4 million which is material to the group's financial statments aslo the
assets are material as it is 27.3% of total asset of the group so material to the financial statements.

Myron Co is at advanced level of sales of sceinfific division and thus the sales agreemenyt is about to be
finalizied by 1st august thus indicate the sale is highly probable and the potential buyer has been found this
indicates that the criteria of discontinued operation has been met.

for the discontinued operation the disclosure needs to be made in the financial statements and the assets related
to it needs to be classified under current assets and the and the results should be presented saperately in the frofit
and loss account of the finacial statments. 

even though it meets the criteria for discontinued operation the disclosure has not be made to the financial
statments this could impact the decision making of the investors and hence as a result the financial statemet is
materially missstated

for the assets heald for sale the depreciation is not charged and immediatly stops when the asset is classified as
heald for sale.

after the classification the assets held for sale and discontinued operations are measured at lower of carrying
amount and   fairvalue less cost to sale which is 42 million.

the fair value which is the sales agreed price 42 million greater than $41 million sates that the financial statemnts
are understated by the $ 1 million

further before classifying the asset held for sale or discontinued operation the the asset or CGU should be tested
for impairment.

Further actions to be Taken:

 the matters identified above  should be discussed with the mangement and the auditor needs to obtain the
rationale for not classifing the scientific operations as discontinued operations.

further the auditor needs to discuss the correct accounting treatment which needs to be adjusted in the financial
statments otherwise uncorrected misstatement would result in the material misstatement.

also the auditor should ask the mangement to ament the value in use of $41 millon and change is to $ 42
million. 

if the managemnt refuses to make the adjustments then it should be communicated to the hogher authority and if
still refused the the auditor should seek the written representations from the management that they are ready for
future repercussions.
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Implications for the audit report.

 If the futher adjustemnet are not made then the auditor needs to evaluate the significance of the misstatemnt to
the financial satements.

Non disclosure of the discontinued operation and the the misstatement of $ 1 million is material to the financial
statements but unikely too be pervasive as this affects a confined section of the financial statements. since the
misstatement is material this would result in the qualified openion. Hence the audit report will be modified.

the qualified opeion would be placed in the openion paragraph and the basis of qualified opinion will be
paragraph will be placed immediately after the opinion paragraph. The bais of qualifid opinion paragraph will
include the reasons which resulted in the qualified opinion. 

b) Auditors responsibilities in relation to the other information 

evaluate the matters arising from the extract 

ii) evaluate implications for the completion of trhe udit

and the auditors report

the auditor should reconsider to assess the level of client integrity at the complection and reassement of
consequence on the audit

futher it needs to discussed witjh the ghigher authority if this not solved the the y are questionable.

The inconsistenciey found in the financial statments needs to be included in the other information paragraph for
the highlight of the investors and the shareholders.

further the other information paragraph will includes the auditors respossibilitys toward other informations to
provide the shareholders with the information that the auditors opinion are not formed on other informations.

further there will be an unmodified report as there is inconsistency in the chairs statemnt rather than the audited
financial statements.

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