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Afternoon sir can you please help me with this question about audit report I try to answer but am stuck.
(a) Explain why an auditor might need to modify the audit report.
(b) “Even if the auditor modifies the audit report, there will be some instances where the auditors opinion will not be affected.” Explain this statement.
c) Provide three (3) situations which may lead to financial statements as a whole to not be free from material misstatement.
d) List situations which can result in the auditor being unable to gather enough evidence to conclude that the financial statements are free from misstatement. Provide example for each situation listed.
Most of this is explained fully in Chapter 6 lectures – certainly (a) and (b).
For (c) any three misstatements would do eg wrong inventory valuation.
For (d) it could be no evidence exists/has been destroyed, auditors are prevented from seeing the information, directors refuse to provide explanations or sign letters of representation.
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