Reference no: EM132855320

Question - Case Instructions: Mordok is a financial holding company, during the auditing of the consolidated financial statements.

The audit team identified the following issues:

1. Mordok included in the fixed assets register the client assets of 30 000 total gross value, net value of them is 20 000, the tax value is 22 000.

2. During the independent debt confirmation, the receivable of Mordok from AkukaRacza s.r.o. in amount to €6000 (as at the yearend 4.1 PLN/EURO), were rejected by the debtor, due to the fact the materials were never supplied.

3. There are some case courts identified, the creditor sued the company for 72 123 PLN, which has not been disclosed in the books, the lawyer letter indicated that the claim is justified.

4. The tax office issued a decision on the excessive tax chargé on VAT in amount of 73 150 PLN.

5. There are some salles invoices identified which has been booked to the new accounting year instead of the prior year, the issue of the products and acceptance by the client took place between 16 and 27 of December (in amount of 97 000 PLN net), the cost of sales of the products was 34 215 PLN.

The Mardok management agreed to adjust the fixed assets register and to account for the tax office. In respect of the other issues, they claimed that are irrelevant and rejected to adjust the accounts.

PM for the project is 42000 PLN, VAT @ 23% CIT @20%.

a) Set up the summary of audit difference and indicate the net effect on equity. State what type of the opinion should be issued. What is the minimal correction to be booked to change your view on previous part?