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Soal 15. (Ch. 24). As a part of the audit of R.D.M. Company, a nonpublic company, management request basic financial statements and separately, the same
Soal 15. (Ch. 24). As a part of the audit of R.D.M. Company, a nonpublic company, management request basic financial statements and separately, the same basic financial statements accompanied by additional information Management informs you that the intent is to use the basic financial statement for bankers, other creditors, and the two owners who are not involved in management. The basic financial statement accompanied by the additional information are to be used only by management. Management requests the inclusion of specific information, but asks that no audit work be done beyond what is needed for the basic financial statements. The following is requested: 1. A schedule of insurance in force. 2. The auditor's feeling about the adequacy of the insurance coverage. 3. An aged trial balance of Account Receivable (A/R) and evaluation of the adequacy of the allowance for uncollectible accounts. 4. A summary of fixed asset additions 5. Material weaknesses in internal control and recommendations to improve internal control. 6. A 5-year summary of the most important company ratios, with the appropriate ratios in be determined at the auditor's discretion. 7. A schedule of Note Payable accompanied by interest rates, collected, and a payment schedule. Required: a. What is the difference between basic financial statement and additional information? b. What are the purpose of additional information accompanying basic financial statement.?. c. For the previously listed items (1 through 7), state which ones could appropriately be included as additional information. Give reasons for your answer. d. Assume that an unqualified opinion is proper for the basic financial statements report that no testing was done beyond that required for the basic financial statement report, and that only appropriate information is included in the additional information. Write the proper auditor report
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