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ACC707 - Auditing and Assurance Assignment

   

Added on  2020-05-16

6 Pages575 Words82 Views
Running head: AUDITING AND ASSURANCEAuditing and AssuranceName of the StudentName of the UniversityAuthor’s Note
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1AUDITING AND ASSURANCETable of ContentsQuestion 3........................................................................................................................................2Situation [a].................................................................................................................................2Situation [b].................................................................................................................................2Situation [c].................................................................................................................................3References........................................................................................................................................4
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2AUDITING AND ASSURANCEQuestion 3Situation [a]The auditors use to provide Unqualified audit opinion when they become sure fromconclusive audit evidences that the financial statements are presented fairly and they have beenprepared by complying with the required accounting standards and principles (Mock et al. 2012).In case of Connor Company, it can be observed that the company is relying on bank overdraftheavily for debt repayment due to weak debt position. However, the auditors have not found anymaterial misstatements in the financial statements of Connor Company. It implies that thecompany has prepared their financial statements by complying with required accounting standersand has fairly presented them. Thus, the auditors will issues unqualified audit opinion for ConnorCompany. Situation [b]The auditors issues Qualified audit opinion when the financial statements are prepared bynot complying with the appropriate accounting standards and principles (Ittonen 2012). In caseof this provided situation, it can be seen that the company has not complied with the country’srequired accounting standards as they have been following LIFO instead of FIFO and thisdifference has affected the materiality of the company related to inventory. However, there is notany material misstatement in any other areas of financial statements. For this reason, the auditorswill issue qualified audit opinion and will add an extra paragraph highlighting the reasons for notbeing unqualified.
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