Simon Mani is considering investing in the National Sugar Corporation Limited (NSC), a listed company on...
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Simon Mani is considering investing in the National Sugar Corporation Limited (NSC), a listed company on the local stock exchange market. The company engages in the production of sugar and molasses. Simon has reviewed NSC's 2019 financial report, which shows a net profit of $1 million with net equity of $4 million. The auditor of NSC is PWK Accountants, among the top 5 audit firms in the country. The auditor has issued an unmodified report demonstrating that the financial report shows a true and fair view of the Company. On this basis, Simon is optimistic that his investment in the company will provide maximum returns as he is convinced that the auditor's report has provided the absolute assurance that the Company has accurately disclosed the information in the financial reports and there is no chance that NSC is going to be bankrupted. Moreover, with the unmodified audit opinion, Simon is convinced that NSC's employees, in general, were not involved in any fraudulent activities. Required: What is your comment on the views of Simon regarding NSC's audited financial report? Discuss your answer with reference to appropriate auditing standard(s). (Max. Word limit - 350 words) (10 marks) Simon Mani is considering investing in the National Sugar Corporation Limited (NSC), a listed company on the local stock exchange market. The company engages in the production of sugar and molasses. Simon has reviewed NSC's 2019 financial report, which shows a net profit of $1 million with net equity of $4 million. The auditor of NSC is PWK Accountants, among the top 5 audit firms in the country. The auditor has issued an unmodified report demonstrating that the financial report shows a true and fair view of the Company. On this basis, Simon is optimistic that his investment in the company will provide maximum returns as he is convinced that the auditor's report has provided the absolute assurance that the Company has accurately disclosed the information in the financial reports and there is no chance that NSC is going to be bankrupted. Moreover, with the unmodified audit opinion, Simon is convinced that NSC's employees, in general, were not involved in any fraudulent activities. Required: What is your comment on the views of Simon regarding NSC's audited financial report? Discuss your answer with reference to appropriate auditing standard(s). (Max. Word limit - 350 words) (10 marks)
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Related Book For
Accounting for Governmental and Nonprofit Entities
ISBN: 978-1259917059
18th edition
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely
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