The financial statements of PT Indonesia Motor for the 2021 financial year have been audited by KAP Wijaya. During the
The financial statements of PT Indonesia Motor for the 2021 financial year have been audited by KAP Wijaya. During the discussion of the draft audit report between PT Indonesia and KAP Wijaya, there was a difference of opinion between the client and the auditor. The difference of opinion did not find a solution because the client insisted on asking the auditor to provide an unqualified opinion but the auditor was unable to provide that opinion because of the significant limitation of the audit scope of the client and there was non-compliance in the application of accounting principles. As a result of these differences, PT Indonesia Motor terminated its engagement with KAP Wijaya without issuing an audit report. Furthermore, the management of PT Indonesia agreed to find another auditor, so KAP Dwijaya & colleagues were invited to re-audit the financial statements of PT Indonesia Motor for the 2021 financial year.
a. In your opinion, can KAP Dwijaya accept the request for audit services from PT Indonesia Motor (discuss it from a regulatory and audit risk perspective)? Explain your opinion !
b. If KAP Dwijaya accepts the request for audit services, what audit risks should KAP Dwijaya consider to determine the required audit procedures?
c. In your opinion, what opinion is appropriate for KAP Dwijaya to give to PT Indonesia Motor? Explain why you chose this opinion!