Determine whether additional audit evidence needs

Assignment Help Accounting Basics

Reference no: EM133474094

Standards:
ISA/ASA 560
ISA/ASA 700/705/706
ISA/ASA 500
ISA/ASA 570

Consider each of following independent and material situations.

The financial report date is 31 December 2014.
The field work was completed on 12 February 2015.
The directors' declaration and the Audit report was signed on 19 February 2015.
The completed financial report accompanied by the signed Audit Report were mailed to the shareholders on 18 March 2015.

Subject matter: subsequent events, audit reporting, audit evidence, going concern

B You are an auditor of XY Limited (XY), a manufacturing client.XY has plans to upgrade its manufacturing process and plans to finance this by a sale of property which is superfluous to its needs, situated next to its head office. The property has been subdivided for the purposes of the sale and placed on the market in December 2014. On 25 January 2015, the state government approved a pian for the construction of an express freeway. The plan will result in the appropriation of a portion of the property owned by XY and subdivided for the purpose of sale. Construction of the freeway will begin in late 2015. No estimate of the compensation payment is available.

For each of the events A to C, do the following.

Question 1. Outline the required treatment in the financial report, if any. Justify your answer.

Question 2. Determine whether additional audit evidence needs to be obtained. if so, describe the nature of the audit evidence to be obtained and the audit procedures used to obtain it.

Question 3. If no action is taken by management, determine the most appropriate audit report to be issued.

Reference no: EM133474094

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