- 15 Marks
AAA – L3 – Q54 – Audit Reporting
Discuss modified audit opinions and outline the auditor's report for a material inventory issue at Eunice Pharmacies.
Question
54 Eunice Pharmacies
During the course of your audit of Eunice Pharmacies for the year ended 30 April, you establish that the company did not carry out a year end physical inventory count at one of its retail branches and there are no alternative procedures that can be applied to confirm the quantities. The directors have estimated the branch inventory value.
At the conclusion of your audit you decide that the problem is material, but not pervasive, to the view given by the financial statements.
Required
(a) Explain the different types of modified audit opinions, giving an example of situations which may give rise to each type.
(b) Set out the main elements of the auditor’s report for the situation set out above.
Find Related Questions by Tags, levels, etc.
- Tags: Audit Opinions, Auditor’s Report, Financial Statements, Inventory, Modified Opinions
- Level: Level 3
- Topic: Reporting
