Question
You are auditing Orange Pty Ltd (Orange. The directors of Orange have determined that the company is not a reporting entity (as defined by SAC
You are auditing Orange Pty Ltd (Orange. The directors of Orange have determined that the company is not a reporting entity (as defined by SAC 1). During the year, Yellow changed its deprecation method from straight-line to units of production because this was thought to provide a more relevant measure of financial performance. Orange also early adopted a new accounting standard that will become mandatory in the following year. This was disclosed in Note 1 to the financial statements. You are satisfied with the early adoption of the accounting standards, and that the change in depreciation method is appropriate. However, the directors refused to accept your request that the change in depreciation method be disclosed in the notes to the financial statements, because they believe it to be commercially sensitive information.
REQUIRED:
(i) State the audit opinion you would give and the reason for giving it.
(ii) Identify any matters that you are required to include in a separate paragraph in your audit report and the title of the paragraph.
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