Golden Foods (GF) Ltd makes pies, pastries and pizzas, which it sells to retailers under its own brand-name and also supplies to a major supermarket chain. It has two sites: the bakery and its head office at Darlington, and a distribution depot in Wolverhampton.

GF’s year-end is 31 March 19X9 and its accounts are required to be ready for publication by 30 May. It is now 19 May and the final audit work is due to be completed by 20 May. The manager in charge of the audit is reviewing the audit file with a view to identifying any unresolved problems.

(You may assume that an interim audit has been performed, and that its results were satisfactory except for any deficiencies specifically mentioned in the case study.).....................................

QUESTIONS FOR DISCUSSION
Assuming that the results of the audit were satisfactory in all other areas:
1. Identify the unresolved problems which the audit manager has to clear.
What is the potential impact of each on the financial statements?
2. Suggest how each of the problems might be resolved by the audit team and/or GF’s management in the time available. The alternatives might include:

(a) altering the accounts;

(b) qualifying the audit report;

(c) obtaining management assurances in the letter of representation

(d) performing additional audit work.
In each case you should be specific about the steps to be taken (e.g. what tests are to be performed, what audit qualification is needed, etc.).