Q5. Audit Opinions

You are auditing Barro Imports Ltd for the year ended 30th June 2021. The company is incorporated in Australia and imports a variety of products from Spain, such as flamenco guitars and clothing, and Spanish knick-knacks. Consistent with previous years, Barro accounts for inventory on a last-in, first- out (LIFO) basis, and has a policy of waiting one year after the last sale date before writing stock down. Unfortunately the coronavirus pandemic has meant an end of year stocktake was not performed, and you have been unable to apply other procedures to validate the existence of the inventory at balance date.

Required:

Using the Framework for Audit Opinions studied in this unit, explain the most appropriate auditors opinion for Barro Imports for the year ended 30th June 2021. Justify all aspects of your response.