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In the case below, you may assume there are no other material misstatements that what may be described in the case (there is no guarantee
In the case below, you may assume there are no other material misstatements that what may be described in the case (there is no guarantee there is a material misstatement seeded into the case) You are auditing Kyoto Sake Pty Ltd. They are a small company brewing sake here in Australia. They have recently raised $5m capital through an invitation for new shareholders. Their current total assets is $2m. The $5m was spent on $1m worth of additional brewing equipment, and the remainder was spent to help set up export networks for their product. This has included hiring staff in the USA and Singapore, as well as setting up offices and distribution warehouses. You find that there is a problem with depreciation for all PPE - there was an incorrect number of years for useful life use. There are also some problems with the foreign currency transactions. Management have agreed to make the adjustments to financial statements for both of these issues. As you get ready to sign the audit report - the client announces they've signed an agreement to be purchased by a major international alcohol company. They add this information to the note disclosures in the financial statements
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