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The new auditor of the long established company Spring In Your Step, a limited liability company, which manufactures beds, was appointed on 1 July 20X1. While conducting his first audit on the financial statements for the year ended 31 December 20X1, the auditor asked to review the predecessor auditor's working papers in order to obtain comfort on the opening inventories figure at 1 January 20X1 which was stated at $1.5m. The audit work on other aspects of the financial statements has been completed with satisfactory results. The predecessor auditor had signed an unmodified report in respect of the year ended 31 December 20X0 but refused the new auditor's request to review his working papers. The new auditor was unable to carry out alternative audit procedures to confirm the value attributed to opening inventory. The audited closing inventory figure for the year ended 31 December 20X1 was $1.8m; revenue was $12.6m and profit before tax $1.2m. What form of opinion should the auditor give? A. An unmodified opinion but with an additional paragraph indicating that the predecessor auditor was responsible for expressing an opinion on the value attributed to inventory at 1 January 20X1. B. A disclaimer of opinion expressing an inability to obtain sufficient appropriate audit evidence as to the truth and fairness of the financial statements for the period ended 31 December 20X1 C. A qualified opinion expressing an inability to obtain sufficient appropriate audit evidence as to the truth and fairness of the financial statements for the period ended 31 December 20X1 D. A qualified opinion on the basis of a material misstatement in the financial statements for the period ended 31 December 20X1 |