Discuss the effect of the misstatement identified on the audit opinion. [10 Marks] The final materiality figure
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Discuss the effect of the misstatement identified on the audit opinion.
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[10 Marks] The final materiality figure for the 2019 audit of Takunda (Pty) was set at R150 million. During the audit of Capital Assets, the auditors identified misstatements in the valuation of major moveable tangible assets. The financial reporting framework for Takunda requires that the company records assets on receipt of the item at cost of acquisition. Where the cost cannot be determined accurately, the asset should be stated at fair value. Where fair value cannot be determined, the asset should be included in the asset register at R1. Takunda's major movable tangible assets as disclosed in the financial statements did not in all instances reflect the cost or fair value of the assets and consequently assets were overvalued by R193 million. [10 Marks] The final materiality figure for the 2019 audit of Takunda (Pty) was set at R150 million. During the audit of Capital Assets, the auditors identified misstatements in the valuation of major moveable tangible assets. The financial reporting framework for Takunda requires that the company records assets on receipt of the item at cost of acquisition. Where the cost cannot be determined accurately, the asset should be stated at fair value. Where fair value cannot be determined, the asset should be included in the asset register at R1. Takunda's major movable tangible assets as disclosed in the financial statements did not in all instances reflect the cost or fair value of the assets and consequently assets were overvalued by R193 million.
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The misstatement identified in the valuation of major movable tangible assets could have a significant impact on the audit opinion of Takunda Pty Limi... View the full answer
Related Book For
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws
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