Siffre Industries of Port Elizabeth, South Africa, has several subsidiaries which are consolidated into the Siffre Industries

Question:

Siffre Industries of Port Elizabeth, South Africa, has several subsidiaries which are consolidated into the Siffre Industries financial statements. Empire Manufacturing is a manufacturing subsidiary that is one of the components that is being consolidated into Siffre’s financial statements. Empire Manufacturing’s largest customer, Turley Distributing, has gone bankrupt one month after the balance sheet date. Siffre is being audited by Van der Merwe, Coetzee and

Schmulian (VCS).

Required:

A. Discuss the consolidation process.

B. Discuss how the work on subsequent events should be handled.

C. If Siffre refuses to revise their financial statements and disclosures because of the subsequent event, how will this affect the opinion of audit firm Van der Merwe, Coetzee and Schmulian?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...