You are the auditor for CKCS Limited (CKCS) for the financial year ending 30 June 2019. Fieldwork for the CKCS Limited (CKCS) engagement was completed on 21 August 2019 and the audit report is due to be signed on 27 August 2019. On 7 July 2019, a large sale was made by CKCS Limited (CKCS) to an overseas customer. The sale was made at a substantial discount below the cost of the inventory at which it was recorded on balance date. Which of the following describes the MOST appropriate action, if any, you would require CKCS Limited (CKCS) management to undertake in relation to the financial report?

Select one:

a. Disclose by way of subsequent event note to the financial statements. 

b. Provide a management representation letter that the amount of the sale is not material. 

c. No action required. 

d. Adjust the financial report.

Answer rating: 100% (QA)

b Provide a management representation letter that the amount of the sale is not material All financi... View the full answer