Question
Analyse and explain how the following situation would affect the audit report for the financial year ended on 31 December 2020, assuming you are the
Analyse and explain how the following situation would affect the audit report for the financial year ended on 31 December 2020, assuming you are the audit partner of Trans-Pacific Ltd.
Trans-Pacific Ltd is a large wholesaler operating in Brisbane. Due to restricted access to the clients warehouse, the audit team is unable to physically attend inventory stocktaking or perform test count. Auditors are unable to perform alternative audit procedures for the inventory account. The value of inventory that auditors cannot verify is $5 million, where the materiality for the financial statements is $4 million.
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