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Good day. Can u please assist with the following :
1. What are the elements of a qualified audit opinion (eg must state the IAS it breach etc)
2. Other matter paragraph- what this contain and which part of the audit opinion it is presented3. If Audit opinion qualified in previous year and no change in current year. Does the audit opinion for current year need to make reference to the previous year qualification. If Yes , what part of the audit opinion this is stated (eg of the qualification is that the company does not disclosed a cash flow statement in previous year as well as current year).
4. What is the basis to consider a component of a group as significant. As stated in BPP, It should be 15 % or more. What i don’t understand what is used to calculate the 15 %, whether Revenue (component revenue/ group revenue), Total Assets(total assets of the component/ group total asset), Profit before tax(component PBT/Group PBT)5. WHEN a retrospective adjustment is required due to change in accounting policy (eg from amortisation of goodwill to annual impairment). When does this new policy effective from that is from the date the item was recognised in the books or from the date of the new policy. How this will impact previous year financial statements.
1) Check this out:- Qualified audit reports | | | ACCA You’ll find it by putting “qualified audit report” in Google and it’s about the fourth one down
2) And this:- Emphasis of Matter Paragraphs in the Auditor’s Report
6. If the auditor considers it necessary to draw users’ attention to a matter presented
or disclosed in the financial statements that, in the auditor’s judgment, is of such
importance that it is fundamental to users’ understanding of the financial
statements, the auditor shall include an Emphasis of Matter paragraph in the
auditor’s report provided the auditor has obtained sufficient appropriate audit
evidence that the matter is not materially misstated in the financial statements.
Such a paragraph shall refer only to information presented or disclosed in the
financial statements. (Ref: Para. A1–A2)
7. When the auditor includes an Emphasis of Matter paragraph in the auditor’s
report, the auditor shall:
(a) Include it immediately after the Opinion paragraph in the auditor’s
report;
(b) Use the heading “Emphasis of Matter,” or other appropriate heading;
(c) Include in the paragraph a clear reference to the matter being
emphasized and to where relevant disclosures that fully describe the
matter can be found in the financial statements; and
(d) Indicate that the auditor’s opinion is not modified in respect of the
matter emphasized. (Ref: Para. A3–A4)
Other Matter Paragraphs in the Auditor’s Report
8. If the auditor considers it necessary to communicate a matter other than
those that are presented or disclosed in the financial statements that, in the
auditor’s judgment, is relevant to users’ understanding of the audit, the
auditor’s responsibilities or the auditor’s report and this is not prohibited by
law or regulation, the auditor shall do so in a paragraph in the auditor’s
report, with the heading “Other Matter,” or other appropriate heading. The
auditor shall include this paragraph immediately after the Opinion paragraph
and any Emphasis of Matter paragraph, or elsewhere in the auditor’s report
if the content of the Other Matter paragraph is relevant to the Other
Reporting Responsibilities section.That’s direct from Google – ISA 706
3) I’m going to say “Yes” and it would be shown within the paragraph explaining why you are qualifying your opinion
4) I bet that BPP have quoted a reference to an ISA in their answer – can I ask you to check that yourself? It’s all on Google
5) Well, you can’t really go back and start annually impairment reviewing from the date of acquisition of the subsidiary. And I wouldn’t be happy to revalue the goodwill upwards because that’s what the figure would have been if we had been doing annual review. So I can only suggest that the new policy be implemented prospectively – but I could be wrong on that 🙁
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