Accounts: Auditor Report, Contingent Liabilities, Review Service Engagements

Running head: ACCOUNTS
Accounts
Name of the Student
Name of the University
Author Note

ACCOUNTS
Table of Contents
Answer to requirement 1:...........................................................................................................3
Answer to requirement 2:...........................................................................................................4
Answer to requirement 3:...........................................................................................................5
Answer to requirement 4:...........................................................................................................7
Answer to requirement 5:...........................................................................................................9
References list:.........................................................................................................................11
Bibliography:............................................................................................................................13

ACCOUNTS
Answer to requirement 1:
a) Some of the information’s that are not required to be part of auditor report are as
follows:
 It is not necessary for auditors to mention about the presentation of comparative
financial statement. The information about presentation of comparative financial
statements is not required to be reported by the auditor in their audit report
(Aicpa.org, 2019).
 The change in the method of accounting for long term constructions need not be
included in the audit report. However, the footnote of change in the accounting
policies should be mentioned in the report.
 The inability of audit firm in performing the confirmation procedures of account
receivables should not be included in audit report. It is so because confirmation is
taken in order to obtain evidence from third parties.
b) Some of the deficiencies that were reported by the auditor in their report are listed
below:
 The exact date of conducting audit has not been disclosed in the report and the
balance sheet has not been stated at the end of year.
 No introductory explanation has been given about the roles and responsibilities of
management. In addition to this, no material misstatements have been reported in the
auditor report.
 The paragraph of opinion presented is in relation with the previous year and the
application of generally accepted auditing standards is not consistent (pcaobus.org,
2019).

ACCOUNTS
 Furthermore, a qualified opinion was issued by auditors about the disappointment on
cash flow statement.
 The statement of retained earnings and income statement has been audited that has
been prepared quarterly. In addition to this, the balance sheet has not been reported on
the year end for audit.
 Moreover, there is no independent disclosure about the scope of paragraph.
 Auditors have not provided any reasonable assurance that the transactions are
recorded which are necessary to permit the financial statement preparation and the
expenditure and receipts are being made according to the management authorization
(Hay, 2015).
Answer to requirement 2:
Some of the deficiencies that could be identified from the tentative report presented
by staff accountant are as follows:
 Although the auditor has examined the American broad band’s consolidated balance
sheet for the year ending December, 2010 and 2011. Therefore, introductory
paragraph mentioned about conducting audit of the financial statements of both the
years. However the opinion of the audit about the fair presentation of the financial
statements in accordance with the generally accepted principles of USA has been
expressed only for the year December 31, 2011. Moreover, there is no mentioning of
the word independent in the auditor’s report.
 There should be clear indication in the report about the introductory paragraph about
the portions of financial statement that have been audited separately when the auditor
is making reference to other auditor. However, the report does not mention any such
thing.