In respect of each of the situations outlined below, reach a conclusion on whether or not you would modify your audit report. Give reasons for your conclusion and describe the effect on your audit report. The year end in each scenario is 30 September 2021.

Company "A"is a charity with several dog rescue centres around the country.They received a government cash grant of 250,000 in August 2021 to help with the purchase on non-current assets which have estimated useful economic lives of between five and ten years. The 250,000 has been credited directly to the profit and loss account for the year ended 30 September 2021.

This treatment is not in accordance with the accounting standard on accounting for government grants nor the specific requirements of the grant allocation. Current accounting guidance requires this grant to be credited to profit and loss over the useful economic lives of the assets to which the grant relates.

The Director of Finance insists on continuing with the current treatment even though it is incorrect.

The year end profit for HFD for the year ended 30 September 2021 is 500,000.