[mandyyyyan]

If there is audit evidences showing the non-disclosure of material item, auditor might express an except for opinion.

If there isn’t any non-disclosure of material item, the auditor can issue an unqualified report.

Am i correct?

[mandyyyyan]

Okay, understood! 🙂

And, as for the error in depreciation to be corrected, the company should take the industry estimates lives of between 4-6 years as its depreciation benchmark?

[mandyyyyan]

Thanks Sir!

I have another question under the same topic.

The company depreciation policy writes off motor vehicles over 10 years.
It consistently reports losses of disposal on motor vehicles.
Depreciation charge p.a. is $5m
Net profit is $40m
Other componies in the industry use estimated lives of between 4-6 years.

5m/40m x100% = 12.5% > 5-10% of the net profit
The consistent losses on disposal & the inappropriate depreciation charge p.a. affected the figures in P&L & B/S. Hence, auditor should express adverse opinon.

Or

As long as the company consistently applied the same depreciation policy, regardless of the industry average estimates, the audit report should be unqualified.

Which one would be suitable for the above question?

[Author]

Posts