As the audit manager assigned to the audit of Daffy Ltd (Daffy), you are currently in...
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As the audit manager assigned to the audit of Daffy Ltd (Daffy), you are currently in completion phase. Final materiality has been set at R900 000. The following issues were identified during the audit Daffy's computerised wages program is backed up daily. However, for two months during the period under audit, the wages records and the backups were corrupted and could therefore not be accessed. The wages for these two months amounted to R1 1 million. 22 Daffy's main competitor has filed a lawsuit for R5 million against the company. alleging a breach of copyright. This case is ongoing and will not be resolved prior to the audit report being signed. The matter is correctly disclosed as a contingent liability You are required to: 21 Discuss the impact that the above-mentioned issues will have on the audit opinion. (5) Draft the opinion and basis for opinion paragraphs for the two above-mentioned issues. (12) As the audit manager assigned to the audit of Daffy Ltd (Daffy), you are currently in completion phase. Final materiality has been set at R900 000. The following issues were identified during the audit Daffy's computerised wages program is backed up daily. However, for two months during the period under audit, the wages records and the backups were corrupted and could therefore not be accessed. The wages for these two months amounted to R1 1 million. 22 Daffy's main competitor has filed a lawsuit for R5 million against the company. alleging a breach of copyright. This case is ongoing and will not be resolved prior to the audit report being signed. The matter is correctly disclosed as a contingent liability You are required to: 21 Discuss the impact that the above-mentioned issues will have on the audit opinion. (5) Draft the opinion and basis for opinion paragraphs for the two above-mentioned issues. (12)
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Answer rating: 100% (QA)
21 Impact on the audit opinion The first issue regarding the wages records and backups being corrupted for two months during the audit period could ha... View the full answer
Related Book For
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
Posted Date:
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