Q5. Audit Opinions

You are auditing Duong Ltd (DL) for the year ended 30th June 2020. DL is a supplier of technology equipment, and you have identified a material misstatement in the inventory account. DL has not written a now obsolete product range down to the lower of cost and net realisable value as required by Australian Accounting standards. Furthermore, in the Chairman's Report it states the company has experienced a 5 per cent growth in market share over the past 12 months. This is inconsistent with your understanding of the business, and when you request a change be made to the Chairman's Report, management disagrees.

Required: Using the Framework for Audit Opinions studied in this unit, explain the most appropriate auditor's opinion for DL for the year ended 30th June 2020. Justify all aspects of your response.