Question 1 (15 marks) Consider each of the following independent situations concerning companies incorporated under the Corporations Act 2001 Assume that in each situation the auditors have no concerns other than those prescribed You are the auditor of National Ltd (National) National's Finance Director refuses to adopt AASB 124 Related Party Disclosures on the ground that although the standard required information to be disclosed to the public, National viewed it appropriate that such information should remain known only to the parties concerned You cannot convince management to change its decision However, you are satisfied that the current financial report is materially correct in all regards, apart from the non compliance with AASB 124 You are the auditor of A2 Milk Ltd (A2) A2 has prepared its financial report on a going concern basis which did not disclose that shortly after the year end, its contract with a major supermarket was cancelled Without this important customer, you expect the business to cease trading within six months and it is unlikely that the company will be able to secure any new contracts in that time You are the audit partner of Fun Ltd (Fun), a toy retailer based in Melbourne A significant portion of Fun's sales are on a cash basis and inadequate records have been maintained As a result, you are not in position to conduct audit tests to satisfy yourself that the cash sales are accurate You work for a mid sized audit firm, Green Co One of your clients, Sims Ltd (Sims), a manufacturing company, is currently negotiating with the bank for an extension of its loan facility The loan is due for repayment shortly after the Annual General Meeting Without this refinancing, Sims will not be able to continue its operations You are the auditor of Green Ltd (Green), a construction company The Chief Executive Officer (CEO) of Green refuses to give you access to reports produced by an independent quantity surveyor in relation to the value of work done on some of their construction projects You are the auditor of Gem Ltd (Gem), a consolidated entity A significant component of Gem's accounting records has been seized indefinitely by the Australian Government authorities Required For each of the above situations (a f), determine the appropriate audit opinion to be issued and explain providing the appropriate reasons (6 situations 2 5 15 marks)

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Question 1 (15 marks) Consider each of the following independent situations concerning companies incorporated under the Corporations Act 2001. Assume that in each situation the

Question 1 (15 marks)

Consider each of the following independent situations concerning companies incorporated under the Corporations Act 2001. Assume that in each situation the auditors have no concernsother than those prescribed:

You are the auditor of National Ltd (National). National's Finance Director refuses to adopt AASB 124 Related Party Disclosures on the ground that although the standard required information to be disclosed to the public, National viewed it appropriate that such information should remain known only to the parties concerned. You cannot convince management to change its decision. However, you are satisfied that the current financial report is materially correct in all regards, apart from the non-compliance with AASB 124.

You are the auditor of A2 Milk Ltd (A2). A2 has prepared its financial report on a going concern basis which did not disclose that shortly after the year end, its contract with a major supermarket was cancelled. Without this important customer, you expect the business to cease trading within six months and it is unlikely that the company will be able to secure any new contracts in that time.

You are the audit partner of Fun Ltd (Fun), a toy retailer based in Melbourne. A significant portion of Fun's sales are on a cash basis and inadequate records have been maintained. As a result, you are not in position to conduct audit tests to satisfy yourself that the cash sales are accurate.

You work for a mid-sized audit firm, Green & Co. One of your clients, Sims Ltd (Sims), a manufacturing company, is currently negotiating with the bank for an extension of its loan facility. The loan is due for repayment shortly after the Annual General Meeting. Without this refinancing, Sims will not be able to continue its operations.

You are the auditor of Green Ltd (Green), a construction company. The Chief Executive Officer (CEO) of Green refuses to give you access to reports produced by an independent quantity surveyor in relation to the value of work done on some of their construction projects.

You are the auditor of Gem Ltd (Gem), a consolidated entity. A significant component of Gem's accounting records has been seized indefinitely by the Australian Government authorities.

Required:

For each of the above situations (a-f), determine the appropriate audit opinion to be issued and explain providing the appropriate reasons. (6 situations *2.5= 15 marks)