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Dear professor:
The question is in September 2017 AA exam, “the company issues 100,000…”, why choose (2)? I choose (1) as I think it happens after the y/e, so it is non-adjusting event and should not be included in the FS.Thank you so much
Are you referring to the question in the examiner’s report?
“The company issued 100,000 $1 ordinary shares in August 20X7. This is currently not reflected in the financial statements for the year ended 31 July 20X7.
If no changes are made to the financial statements which of the following audit opinions will be issued?”
It is NON-adjusting but assuming the matter to be material (we should – otherwise it is a “non-question”) it should be DISCLOSED. So if not disclosed the audit opinion should be qualified “except for” the lack of disclosure – option B.
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