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I the financial statement has been approved and also the auditor report was sign on 18 Mar 20×9
for the year end 31 Mar 20×8.
on 31 mar 20×9 you became aware that there is major customer has ceased to trade.If the management on 4th Apr 20×9 has adjusted the financial statements to write down the amount due from the major customer .
the question is asking what is the type of the report will you give if there is no disclosure of the matter ?
I want to know here we should focus on the report date which was 18 Mar 20×9 on which the FS was also issued. So why the answer is qualified not unmodified .
Did the management know about the matter before or after the report date ?
Here the date which the question is concern about is 18 Apr 20×9 or after that?
Do we have to assume that the directors know about the matter before the FS Issue,but they only have adjusted on 8 Apr 20×9.
Please clarify me sir,
I can’t follow your post (why you are referencing 8th and 18th April for example?)
But following on from Q14, the directors have adjusted the financial statements for the y/e 31 Dec 20X8 – specifically, a “bad debt” has been “written off”.
However, as the answer justification points out, even though the fact that the debt is not recoverable has been correctly accounted for (i.e. with a Dr/Cr) – this is not enough. Per IAS 1, individually material transactions/events need to be disclosed. The audit opinion is therefore qualified for the misstatement of omission of disclosure.