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Hello dear tutor…
Q1:If there is a JUDGEMENTAL MISSTATEMENT(where the judgements of auditor and manager is different eg:level of inventory provision) and it is MATERIAL…..
What is the effect on report(as it is not breach of standard) if the management do not amend the FSs?(is it correct to say:when managers and auditors have different judgements about something which is judgemental, the auditor should assess the management’s judgement to be reasonable and if their judgements arenot reasonable which lead to JUDGEMENTAL MISSTATEMENT, the auditor should consider the materiality and pervasiveness and then provide ADVERSE or QUALIFIED except for opininon(because of disagreement)if it is material and based on pervasiveness)Q2:could you please only NAME some more possible judgemental misstatement examples?(life of asset,…)
Thank you in advance
q1 – yes, that would be OK
q2 – ANY area where there is a material figure that is given as a result of management estimation of subjective judgement …
… what about something like ‘extent of provision for receivables’ or ‘estimation of asset useful lives’ or even something as simple as ‘residual value of assets’
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