i. Your client reported a note receivable consisting of principal and accrued

interest receivable. The maker of the note filed a bankruptcy petition, but

the client refused to reduce the recorded value of the note to its net

realisable value. The net realizable value was 22 per cent of the amount

reported.

ii. There was a fire that broke out a month before the year-end date. The fire

has destroyed most of the accounting records and underlying receipts and

invoices. Management has reconstructed the accounting records using its

bank statements and other means, but they are uncertain if all material

matters have been taken into account and they would like to wait until after

a couple of months when subsequent receipts may assist them to compile

further outstanding items. You have serious doubts as to the accuracy of

the compiled figures and have been unable to verify any of the material

balances.

iii. An audit client has been making losses over the past few years. After

interpreting key financial ratios, your audit team has substantial doubt

about a client's ability to continue as a going concern for a reasonable

period of time. The client has adequately disclosed its financial difficulties

in a note to its financial report, which do not include any adjustments that

might result from the outcome of this uncertainty. You concluded that there

would be no circumstances to force the company to declare bankruptcy.

Required:

a.Nominate what type of auditor's opinion that you would issue in each of the above

independent situation. Explain your answer. (9 marks)

b.Identify five deficiencies or weaknesses in the following audit report.

c. Identify FIVE deficiencies or weaknesses in the following audit report. (10 marks)