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Greetings. I would like to know how to identify whether is it pervasive from this condition :
the research expenses was capitalised $2.1m and it stands 8% of PAT.
Since it’s a mistreatment of accounting policy, why is it material but not pervasive ?
I thought this should be adverse opinion.
It is not the cause of the misstatement that makes it pervasive. It depends on whether it makes the FSyllabuses effectively worthless.
2.1 is in the 5% to 10% range of PAT so it is material, however the misstatement can be isolated and 92% of PAT are OK.
what about the insufficient and inappropriate if audit evidences of year-end receivable and revenue ? for revenue is $15.6m, r/able is $3.4m & PBT is $2m.
If thar receivabless goes bad the profit of 2 becomes a loss,of 1.4. Now we are probably talying a out a pervasive problem.
will it be possible if my answer stating if the auditor has method to recover the lose of documents, the opinion will be qualified except for… and the marker will accept it though differ from the scheme ?
Deciding on pervasiveness is a matter of judgment. If you argue your case well it will get marks.
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