Workpaper ref: _X-001_

Prepared by: ________ Reviewed by: ________

Date prepared: ________ Date reviewed: ________

CTA Audit Firm

Peak Design

30 June 2019

Summary of misstatements

Below is a summary of misstatements found by the audit team.

Materiality has been set at $50,000

Identify the misstatements that you will request Peak Design management adjust in the Outcome column.

Item	Description	Amount	Outcome
1	Sales Issues found during cut-off testing. Selected all transactions within 3 days of EOFY and tested.	$132,000 overstatement
2	Depreciation expense & accumulated depreciation Incorrect useful life and method applied. Correction to the Notes also required.	$49,000 understatement
3	Legal fees Some fees paid for services in advance and accrual not recorded	$24,000 overstatement
4	Repairs & maintenance Transposition errors in some journal entries	$9,000 understatement
5	Employee entitlements Long service leave entitlements incorrectly calculated - 2 staff who took leave without pay for 12 did not have this accounted for in the calculations	$15,000 overstatement
6	Lease expense PD have failed to implement the new leasing accounting standard	$58,500 overstatement & flow on accounts
7	Property plant and equipment New equipment in San Francisco store mistakenly not included	$23,000