Q1) The draft financial statements of Copper Co show profit before tax for the year was $1.2 million. The auditor has identified the following misstatements:

No credit loss allowance for an irrecoverable debt $92,000

Unrecorded sales due to an invoice processing malfunction $85,400

Omission of accrual for interest expense $19,400

Which of the misstatements are required to be corrected in order to form an opinion that the financial statements as a whole are free from material misstatement?

Misstatement 1 only

Misstatement 2 only

Misstatements 1 and 2 only

Misstatements 1, 2 and 3

Q2) Which of the following is most likely to cast doubt on a company's ability to continue as a going concern?

Borrowings secured by charges over the company's assets

Obtaining additional capital to finance investment in plant and equipment

Expensing all development costs to the statement of profit or loss rather than capitalising them as assets

A major customer becoming insolvent