Auditing and Control in the Organization

Running head: AUDITING AND CONTROL IN THE ORGANIZATION
Auditing and Control in the Organization
Name of the Student
Name of the University
Author’s Note

1AUDITING AND CONTROL IN THE ORGANIZATION
Table of Contents
Answer to Question 2......................................................................................................................2
Answer to Question 3......................................................................................................................2
Answer to Question 4......................................................................................................................3
Answer to Question 5......................................................................................................................3
References........................................................................................................................................5

2AUDITING AND CONTROL IN THE ORGANIZATION
Answer to Question 2
It is evident from the above mentioned scenario that the retailer has mentioned the
valuation as the inventory at sales price less than the allowance created for the sales margin.
From the above mentioned fact it can be stated that the retailer has followed wrong accounting
practice. It is being done deliberately so it falls under the purview of the deliberate error as the
retailer has released the allowance on sales price. It is done with the intention to overstate the
value of inventory. The auditor should implement Adverse Audit Opinion to the
company(Cipriano, Hamilton and Vandervelde 2017). The adverse audit opinion is provided by
the auditor when the financial statement of the company is not satisfied as it contains material
misstatement which may affect in the trust issue of the investors and government. Due to the
adoption of the non-acceptable approach of the auditor in the inventory valuation of the
company, the auditor should provide adverse audit opinion.
Answer to Question 3
From the above mentioned scenario it is evident that the customer who bought 45% of
stock from the Block Company has went for liquidation. As the company mainly deals with the
specific nature of products it is very hard for the company to find such big size customer. This is
the major reasons behind the declining sales graph in business operations. Due to this reason the
company are to be questioned whether they can move forward as the going concern. So the
auditor of the company needs to issue Qualified Audit Opinion(Chan, Luo and Mo 2016). The
auditor actually is in doubt regarding the going concern of the company in the future. Moreover
the company has not taken major actions to resolve such issues. So the auditor of Block
Company has gone for Qualified Audit Opinion.So the auditor need to mention about the prove,