Based on your answer to the question 12.34, explain what type of audit opinion you would issue. Why?

Fabrication Holdings Ltd (FH) has been a client of Keith & Fiona Partners for many years. You are an audit senior and have been assigned to the FH audit for the first time for the financial year end 30 June 2017. FH’s’ financial report for the year ended 30 June 2017 shows land and buildings at fair value of $20.8 million. As part of your subsequent events procedures, you become aware that FH sold the property in July 2017 when an independent third party made an unexpected offer of $24.5 million. The difference between the sale price and the amount stated in the financial report (which has not been adjusted) is material. You have not yet signed the audit report.

Data from Question 12.34

Analyse the events surrounding the sale of land and buildings. Is it a subsequent event? If so, which type?

Fabrication Holdings Ltd (FH) has been a client of Keith & Fiona Partners for many years. You are an audit senior and have been assigned to the FH audit for the first time for the financial year end 30 June 2017. FH’s’ financial report for the year ended 30 June 2017 shows land and buildings at fair value of $20.8 million. As part of your subsequent events procedures, you become aware that FH sold the property in July 2017 when an independent third party made an unexpected offer of $24.5 million. The difference between the sale price and the amount stated in the financial report (which has not been adjusted) is material. You have not yet signed the audit report.