A. You are planning the audit work for the client firm, Melbourne Ltd. The audit program for the revenue account for a client has been drafted. One item has stated as follow:

Assertion	Detailed audit procedure
Cut-off	Select a sample of sales invoices recorded a few days prior to the year-ended and then agree dates on the invoices to the dates on the delivery documents signed by the customer.

REQUIRED:

1. Does the procedure address the stated assertion?
2. If your answer to (a) is no, provide the correct assertion or explain what work would be required to address the assertion.
3. Explain what type of evidence is obtained by performing the stated procedure. How persuasive is it?

B. You are the audit partner of the CCC&Co audit firm and audit the work for different client firms. You consider the following independent and material situations:

1. CCC&Co audit firm was assigned as the auditor of Brisbane Ltd after the annual physical inventory count was conducted. The accounting records of Melbourne ltd were not sufficiently reliable to satisfy your firm as to the balance of inventory reported on the balance sheet.
2. Your client, Melbourne ltd, has been making losses over the past few years. after interpreting key financial ratios, CCC&Co audit firm has substantial doubt about a client's ability to continue as a going concern for a reasonable period of time. Melbourne Ltd has adequately disclosed its financial difficulties in a note to its financial report, which do not include any adjustments that might result from the outcome of this uncertainty. You concluded that there would be no circumstances to force the company to declare bankruptcy.
3. For client, Sydney ltd, there was a fire that broke out a month before the year-end date. The fire has destroyed most of the accounting records and underlying receipts and invoices. Management has reconstructed the accounting records using its bank statements and other means, but they are uncertain if all material matters have been taken into account and they would like to wait until after a couple of months when subsequent receipts may assist them to compile further outstanding items. You have serious doubts as to the accuracy of the compiled figures and have been unable to verify any of the material balances.

REQUIRED:

Advise what type of auditor opinion that you would issue in each of the above independent situations from the following choices. Explain your answer.

(1) Unmodified

(2) Unmodified-Emphasis of matter

(3) Qualified

(4) Disclaimer

(5) Adverse