(Learning Objective 1: Expressing an audit opinion) You have just completed the audit of four companies: Alpha,...
Question:
(Learning Objective 1: Expressing an audit opinion) You have just completed the audit of four companies: Alpha, Bravo, Charlie, and Delta. The conclusions of the audits are summarized below for each company.
■ Alpha: Its fi nancial statements are wrought with errors, as the accountant has completely messed up the translation of the process of consolidating Alpha’s subsidiaries. As a result, none of the fi nancial statements faithfully represent the economic phenomenon during the fi nancial period.
■ Bravo: The audit highlighted a number of immaterial differences in the calculation of commission expenses for the year.
■ Charlie: The accountant was not able to explain numerous discrepancies. One of the major problems was that many customer orders and invoices were missing, making it impossible to audit.
■ Delta: Its fi nancial statements fairly represent the company’s fi nancial position and performance, but the audit team disagreed with management’s use of a particular accounting policy.
❙ Requirements Propose the most appropriate type of audit opinion for Alpha, Bravo, Charlie, and Delta based on the audit notes above.
Step by Step Answer:
Financial Accounting International Financial Reporting Standards
ISBN: 9780273777809
1st Global Edition
Authors: Walter T Harrison, Charles Horngren, Bill Thomas, Themin Suwardy