B. During the audit of LDF Co's bad debt provision, the auditor discovered that £500,000 of costs included in the provision did not meet the criteria for inclusion based on the applicable accounting standards. The management of LDF suggested that no adjustment is required as the provision is a matter of judgement and the current provision is deemed reasonable by the management. Requirement: 1. Discuss the differences between the modified and unmodified audit reports. 2. Discuss the above issue and describe the impact of this issue on the auditor's report, if any, should this issue remain unresolved.

B. During the audit of LDF Co's bad debt provision, the auditor discovered that £500,000 of costs included in the provision did not meet the criteria for inclusion based on the applicable accounting standards. The management of LDF suggested that no adjustment is required as the provision is a matter of judgement and the current provision is deemed reasonable by the management. Requirement: 1. Discuss the differences between the modified and unmodified audit reports. 2. Discuss the above issue and describe the impact of this issue on the auditor's report, if any, should this issue remain unresolved.

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter6: Professional Roles

Section6.7: Madison Wells, Audit Manager

Problem 4Q

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During the audit of LDF Co’s bad debt provision, the auditor discovered that £500,000 of costs included in the provision did not meet the criteria for inclusion based on the applicable accounting standards. The management of LDF suggested that no adjustment is required as the provision is a matter of judgement and the current provision is deemed reasonable by the management. Requirement: 1. Discuss the differences between the modified and unmodified audit reports. 2. Discuss the above issue and describe the impact of this issue on the auditor’s report, if any, should this issue remain unresolved.
Question 1 A) Discuss the main components of the audit expectation gap in the capital markets. B) During the audit of LDF Co’s bad debt provision, the auditor discovered that £500,000 of costs included in the provision did not meet the criteria for inclusion based on the applicable accounting The management of LDF suggested that no adjustment is required as the provision is a matter of judgment and the current provision is deemed reasonable by the management. Requirement: Discuss the differences between the modified and unmodified audit reports. Discuss the above issue and describe the impact of this issue on the auditor’s report, if any, should this issue remain unresolved.
1. B) During the audit of LDF Co’s bad debt provision, the auditor discovered that £500,000 of costs included in the provision did not meet the criteria for inclusion based on the applicable accounting The management of LDF suggested that no adjustment is required as the provision is a matter of judgment and the current provision is deemed reasonable by the management. Requirement: Discuss the differences between the modified and unmodified audit reports. Discuss the above issue and describe the impact of this issue on the auditor’s report, if any, should this issue remain unresolved.
During the audit of LDF Co’s bad debtprovision, the auditor discovered that £500,000 of costs included in the provision did not meet the criteria for inclusion based on the applicable accounting standards.The management of LDF suggested that no adjustment is required as the provision is a matter of judgement and the current provision is deemed reasonable by the management. Requirement: 1.Discuss the differences between the modified and unmodified audit reports.(10 marks) 2.Discuss the above issue and describe the impact of this issue on the auditor’s report, if any, should this issue remain unresolved.(10 marks)
Discuss the main components of the audit expectation gap in the capital markets. (10 marks) During the audit of LDF Co’s bad debt provision, the auditor discovered that £500,000 of costs included in the provision did not meet the criteria for inclusion based on the applicable accounting standards. The management of LDF suggested that no adjustment is required as the provision is a matter of judgement and the current provision is deemed reasonable by the management. Requirement: 1. Discuss the differences between the modified and unmodified audit reports. (10 marks) 2. Discuss the above issue and describe the impact of this issue on the auditor’s report, if any, should this issue remain unresolved. (10 marks)
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If an auditor assigns a tolerable misstatement of $1,000 to accounts payable, he or she would need to obtain less audit evidence for that account than if $100,000 had been assigned. * True False TOSHIBA
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