Question: You are an audit manager in Barsa & Co. and have been assigned to audit the financial statements of a new client, VSK Sdn. Bhd.

You are an audit manager in Barsa & Co. and have been assigned to audit the financial statements of a new client, VSK Sdn. Bhd. (VSK) for the financial year ended 31 January 2021. VSK is a company that produces a range of cosmetic products using local fruits. VSK supplies its products only to retailers. The final audit is almost finish and the financial statements and audit report are due to be signed next week. Total assets for the year was RM13 million and profit before taxation was RM4.5 million. You are reviewing the current audit file for the company and your audit senior had left a note for your review. The following points have been included in the note:

Annual report

The profit before tax was reported as RM5.4 million in the Chairman's Statement in the Annual Report. The finance director has stated that the amount in the Chairman's Statement will not be revised as it is time consuming and the difference is insignificant.

Discuss the impact of the following on VSK Sdn. Bhd.'s auditor's report

Annual report.

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