Audit and Insurance Case Study 2022

Running Head: AUDIT AND ASSURANCE
Audit and assurance
Name of the student
Name of the University
Author’s Note

AUDIT AND ASSURANCE1
Table of Contents
Introduction:...............................................................................................................................1
Discussion:.................................................................................................................................2
Case 1:........................................................................................................................................2
Case 2:........................................................................................................................................2
Case 3:........................................................................................................................................3
Case 4:........................................................................................................................................4
Conclusion..................................................................................................................................4
Referencing................................................................................................................................6

AUDIT AND ASSURANCE2
Introduction:
An audit is the study of the financial statements relating to a thorough investigation of
the facts and data mentioned in the financial reports and finally presenting the auditor’s view
on the financial statement through the auditor’s report. An auditor is responsible for
examining the financial statements with the documents and provide an auditor report to the
company. There are four types of auditor’s reports namely, unqualified opinion, qualified
opinion, adverse opinion and disclaimer (Christensen et al. 2016). The aim of this report is to
analyse the given cases on the material and independent matters and identify the type of
auditor report that should be issued to the case with a detailed justification.
Discussion:
Case 1:
Qualified opinion will be issued in this case.
A qualified report is a report where the auditor states that the financial statements or
data are not recorded as per the accounting standards and needs rectification or need some
rectification (Cordoş and Fülöp 2015). A qualified report has additional information in the
report stating what is misinterpreted or qualified.
In this case, Beast limited, a wholesale company is engaged in the valuation of
inventory. Inventory valuation was an essential part of the company’s balance sheet and any
misinterpretation with respect to this account would be a great offence. The company uses
last in first out valuation method regarding the valuation of ending inventories. A difference
is shown due to the change in the valuation method of the inventories. As this difference had
a material impact on the inventory balance, it is to be rectified. A qualified auditor report will
be issued stating the mismatch and the material influences that mismatch had on the balance