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Maternity and audit report

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › Maternity and audit report

  • This topic has 3 replies, 2 voices, and was last updated 9 years ago by MikeLittle.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • November 2, 2015 at 2:52 pm #280092
    robbierob
    Member
    • Topics: 9
    • Replies: 11
    • ☆

    Dear Mike,

    Your comments please

    Scenario
    An entity did not capitalise finance cost for an underlying asset in line with IAS23. But The amount not captilised is immaterial to both SOFP and SOCI.

    My answer
    Even though the amount is quantitatively immaterial. Not capitalising finance cost is a breach of IAS 23 and is therefore material. As a result the audit opinion will be modified with an except for opinion due to a breach (not pervasive) of an accounting standard.

    My sincere thanks as always

    Robert

    November 2, 2015 at 4:42 pm #280110
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    Not really! IAS only applies to matters that are maternal (your words, not mine!)

    If the borrowing costs not capitalised is immaterial to both the statement of profit or loss and the statement of financial position, then it’s immaterial.

    Is there not a word in the “standard” audit report saying that the work of the auditor is to try to establish that the financial statements are free of material misstatements?

    No, no affect of the audit report, sorry

    November 2, 2015 at 5:19 pm #280116
    robbierob
    Member
    • Topics: 9
    • Replies: 11
    • ☆

    thank you so much. it is now quite clear

    November 2, 2015 at 6:22 pm #280123
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23315
    • ☆☆☆☆☆

    You’re welcome

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