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Hi sir,
Regarding inventory part C
1) “This misstatement is a judgmental misstatement as it arises from the judgements of management concerning an accounting estimate over which the auditor has reached a different conclusion. This is not a breach of financial reporting standards, but a difference in how management and the auditor have estimated an uncertain amount”
2)”Management should be asked to confirm the basis on which their estimate was made, and whether they have any reason why the provision should not be increased by the amount recommended by the auditor”
Could u explain each part seperatly. I dont understand why they use these points to asnwer the q ?
3) i saw in other notes the q has been answered differently as they considered 0.4% of revenue is material as its very close to threshold. Is it a right answer?
Thanks
I am sorry but this forum cannot support you in explaining every individual answer point that you do not comprehend.
If you cannot find a course to attend I suggest you find a suitable study buddy https://opentuition.com/studybuddy/
As I have said before there is often no one right or one answer – we cannot generalise and say that because something is close to a materiality threshold it is material – otherwise how close is close and why have a threshold at all? So any other relevant factors should be considered also.
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