In simple english, if there are limtations of scope ; such as not being able to attend stock count but you have accounted for it and have come up to a point where you have to deliver your audit opinion. Audits require us to carry out work but since this was info given to us, the opinion we give is qualified but am not sure if it is - 'qualified except for' or 'qualified with a disclaimer'.
Can you help?
2007-11-25 04:40:57 · 2 answers · asked by Anonymous in Business & Finance ➔ Corporations
stock was overstated by 27% of overall stock
2007-11-25 04:42:31 · update #1
I would suggest 'qualified with a disclaimer' = you have seen the stock & have been given figures but can not verify them
2007-11-25 09:41:55 · answer #1 · answered by Steve B 7 · 0⤊ 0⤋
Why should it be qualified?? If you performed the prior year audit and , l assume, attended last years stock take then you should be able to agree that the opening balances are correct. By going through the stock purchase and sales invoices you should be able to determine whether or not the levels they say the stock is seems reasonable.
Just because working papers are provided to you and not actually prepared by the audit team does not mean that they are unreliable.
Is stock even material? Who cares if its 27% overstated if the total is not a material figure.
If it is material and there is no actual way to even attempt to compute the closing balance, then it would be 'qualified - except for'.
Remember though, this qualification may continue for many years as you will therefore find it difficult to ascertain the opening balance.
2007-11-26 08:48:49 · answer #2 · answered by Anonymous · 0⤊ 0⤋