Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Jets and Associates, CPAs, is examining the financial statements of New York, Inc., for the year ended December 31, 20X2. This engagement was completed on
Jets and Associates, CPAs, is examining the financial statements of New York, Inc., for the year ended December 31, 20X2. This engagement was completed on March 1, 20X3. Because New York has a small subsidiary located overseas, Jets engaged Namath, CPA, to examine the financial position and operating results of this subsidiary. Namath examined the subsidiary and determined that an unqualified opinion was appropriate. After inquiring of Namath's professional reputation and independence, Jets decided to rely on Namath's audit. Namath refused to allow his report to be presented along with New York's financial statements. During the examination, Jets noticed that New York changed its method of depreciation from the previous year. This change (from straight line to 150% declining balance) was presented in footnote 15 to New York's financial statements. Jets concurred with New York's decision to change depreciation methods. No other unusual circumstances were noted during Jets' audit. Jets also examined the 20x1 financial statements of New York. Jets issued a qualified opinion on those statements because of the inability to examine the overseas subsidiary in that year. Jets feels that this opinion is still appropriate for 20X1. New York is presenting its financial statements in comparative form. REQUIRED: Prepare a draft of the audit report, using the Auditing Standards Board (ASB) format, that should be issued by Jets
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started