Explain the impact on your audit report for Beta plc

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Question - Your client, Beta plc's year end is 31 March 2020 and the draft financial statements show revenue of £28.2 million, receivables of £5.6 million and profit before tax of £4.8 million. The substantive testing stage for this audit has been completed. A customer of Beta owed an amount of £350,000 at the year end and has still not paid. Testing of receivables in April highlighted that no amounts had been paid to Beta from this customer as they were disputing the quality of certain goods received from Beta. The finance director is confident the issue will be resolved and no allowance for receivables was made. However, in your opinion it is unlikely that this customer will settle the debt.

Required - Explain the impact on your audit report for Beta plc, for the period ending 31st March 2020, should this issue remain unresolved.

Reference no: EM132619594

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