Indicate the type of audit opinion you would issue, as well as the reason for issuing the particular audit opinion:

 

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For each of the bellow independent situation, you are required to indicate the type of audit opinion you would issue, as well as the reasons for issuing the particular audit opinion. a) A client holds a note receivable consisting of principal and accrued interest receivable. The note's maker recently filed a voluntary bankruptcy petition, but the client failed to reduce the recorded value of the note to its net realisable value, which is approximately 20 percent of the recorded amount. (3 Marks) b) Recent industrial action has seen trade unions win a pay increase of 4% for all their members. Under the terms of the agreement, the pay increase will be backdated to 1 January 20X7, resulting in a charge equal to 10 % of profit. Management have agreed to the pay increase, however, they have not made any adjustments to the 30 June 20X7 financial report. (3 Marks) For each of the bellow independent situation, you are required to indicate the type of audit opinion you would issue, as well as the reasons for issuing the particular audit opinion. a) A client holds a note receivable consisting of principal and accrued interest receivable. The note's maker recently filed a voluntary bankruptcy petition, but the client failed to reduce the recorded value of the note to its net realisable value, which is approximately 20 percent of the recorded amount. (3 Marks) b) Recent industrial action has seen trade unions win a pay increase of 4% for all their members. Under the terms of the agreement, the pay increase will be backdated to 1 January 20X7, resulting in a charge equal to 10 % of profit. Management have agreed to the pay increase, however, they have not made any adjustments to the 30 June 20X7 financial report. (3 Marks)

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1 Answer Adverse opinion Explanations An adverse opinion is expressed by an auditor when an auditor ... View the full answer