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Hello Sir Mike,
How ‘pervasiveness’ is determined in order to decide the type of audit report?
Sir I know the definition but I find it really difficult to apply its criteria to reach a conclusion of whether the matter is pervasive or not!
(1) When the investment properties of $ 24,152 are not revalued and are carried at their carrying value, this matter is only material but not pervasive. How is pervasiveness determined here?
I suppose the above misstatement affects PPE value in the Statement of Financial Position, Other Comprehensive Income and the Discloures in the Notes to Account!
Sir please help me out!!
“I suppose the above misstatement affects PPE value in the Statement of Financial Position, Other Comprehensive Income and the Discloures in the Notes to Account!”
Yes, but it’s only the one error – and it doesn’t affect the statement of profit or loss, the cash flow, the ratio analysis and it’s clearly explained in your ‘except for’ opinion
Pervasive is where the view shown by the financial statements is clearly WRONG in a big way or where there are so many areas of uncertainty that those financial statements could have been produced by the tooth fairy (assisted by Santa Claus)
OK?
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