Question 5a
Marking Guide
yew co | |
| generally up to 1½ marks for each matter discussed/recommended: | |
| – calculate and comment on materiality | |
| – no probable economic benefit – ias 38 recognition criteria not met | |
| – lack of finance – ias 38 recognition criteria not met | |
| – consider whether sufficient appropriate evidence obtained | |
| – financial statements contain material misstatement and implication for auditor’s report | |
| – could indicate fraudulent financial reporting | |
| – lack of cash may indicate going concern problems – extend audit procedures | |
| – audit work should be subject to 2nd partner review | |
| – consider asking for a delay in issuing financial statements if necessary for further evidence to be sought | |
| – discuss apparent inconsistency in chairman’s statement wording | |
| – discuss accounting treatment, potential qualification and chairman’s statement wording with those charged with governance | |
| – include other matter paragraph in report if material inconsistency remains | |
| maximum marks | 12 |