Reference no: EM132762762

Question: You have completed the audit of Dulwich Pty Ltd (Dulwich), a medium sized distributor of fuel to the aviation industry, and are about to prepare the audit report. This is the fifth year your audit firm has audited Dulwich, but it is the first year in which you have been the Audit Senior. Most of the owners of Dulwich also work in the company and have determined that the company is not a reporting entity. Consequently Dulwich prepares special purpose financial statements.

Overall, you are satisfied that Dulwich's financial statement provide a true and fair view of the firm's financial performance and position. The only issue of concern to you is a legal claim against the company, which was lodged three months before the end of the financial year by a competitor, which claimed that Dulwich had engaged in anti-competitive practices. You discussed this issue with Dulwich's directors. While the directors felt that the claim is without merit, they agreed with you that it would be wise to disclose the claim in a note to the accounts.

Because this is your first year as the Audit Senior, the Audit Partner who will sign-off on the audit has asked you to you to prepare a memo in which you outline the audit opinion you believe to be appropriate; your reasons for determining the opinion; and the content and titles of any additional paragraphs you believe should be included in the audit report.

Required: Prepare the memo requested by the Audit Partner.