the consolidation process involves making adjustments to the individual finacial stetements and ledger accounts

any of it. uneid statements are prepared for a different time they must disclose the reaso 20. The consolidation process involves making adjustments to the individual financial statements and ledger accounts of the entities within the group. Response Click or tap here to enter text. w N] Ti (hp Osvo IMH Paragraph BUACC5935 Auditing and Assurance Services Semester 1 2020 Question 1 (8 + 5+ 6 = 19 marks) a. You are the audit partner of Simon & Co., a large audit firm that is operating in Melbourne. Your firm audited ABC Ltd, a custom-made products manufacturing company. ABC Ltd declared bankruptcy within six months of receiving an unqualified auditor's opinion on its financial statements for the year ended 31 December 2018 The XYZ bank initiated a court challenge against your firm on the grounds that the bank disbursed a $2,500,000 loan to ABC Ltd in May 2019, but ABC went bankrupt shortly afterwards. The plaintiff alleged that your firm's 2018 audit of ABC was deficient and argued that the auditors failed to uncover that the value of ABC's inventories were substantially lower than reported on the balance sheet. Your audit firm did not issue privity letters to any third party in the past four years. Required: With reference to the principles established in common law, explain whether the XYZ bank is likely to be successful. (8 marks) Suggested