Question

Which invoices should be recorded in purchases for the year? All of them All of them except 94497 All of them except 95493 and 94498 All of them except 94497 and 94498 A. B. D. 19. Which of the following is only included in an Audit report to shareholders, if the client is listed? A. Matters on which we are required to report by exception B. Key Audit Matters C. Responsibilities of directors D. Other information 20. Pebble is a new client of Rock LLP, its year end was 31 January 2018 and the firm was only appointed tth auditors in February 2018, as the previous auditors were suddenly unable to undertake the audit. The fieldwork stage for this audit is currently ongoing. The inventory count at Pebble's warehouse was undertaken on 31 January 2018 and was overseen by the company's internal audit department. Neither Rock LLP nor the previous auditors attended the count. Detailed inventory records were maintained but it was not possible to undertake another full inventory count subsequent to the year end. The draft financial statements show a profit before tax of £2-4 million, revenue of E10-1 million and inventory of fe £510,000 What form of audit opinion should the auditor give in respect of the financial statements for the year ended 31st December 2016? A. An unmodified opinion B. A qualified opinion on the grounds of disagreement C. A qualified opinion on the grounds of limitation in scope D. An adverse opinion (20 marks)

an 19 & 20

Answer 1

19. B (ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report states that for audits of listed entities, a new section in the report, called Key Audit Matters (KAM), will highlight those issues that, in the auditor’s professional judgment, were of most significance in the audit. )

20. C (Given that the auditors were not allowed the opportunity to participate in an inventory count, they need to offer a qualified opinion on the grounds of scope limitation. They can reserve their judgement on the inventory valuation and mention it on the audit report since they were unable to observe the count themselves in course of the year)