I have to draft a qualified audit report and the point of qualification is dicripencies found in the areas of inventories, debtors and creditors. Just wanted to know if some one from you can provide me a sample of a qualified report and you may also suggest me some annual report where you have come across any qualification of these kind.
21 August 2010
Included in the debtors shown on the balance sheet is an amount of Rs. 5.00 Lacs due from a company which has ceased trading. The company has no security for this debt. In our opinion the company is unlikely to receive any payment and full provision of Rs. 5.00 Lacs should have been made. Accordingly, debtors should be reduced by Rs. 5.00 Lacs, Provisions for deferred Taxation should be reduced by Rs. XXX and profit for the year and retained earnings should be reduced by Rs. XXXX Except for the financial effect of not making the provision referred to in the preceding paragraph, In our opinion the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice
21 August 2010
However, with respect to stock having a carry amount of Rs. 5.00 Lacs the evidence available to us was limited because we did not observe the counting of the physical stock as of 31 March 2010.Owing to the nature of the company’s records, we were unable to obtain sufficient appropriate audit evidence regarding the stock quantities by using other audit procedures. Except for the financial effects if such adjustments, if any, as might have been determined to be necessary had we been able to satisfy ourselves as to physical stock quantities, In our opinion the financial statements give a true and fair view, in accordance with Generally Accepted Accounting Practice
21 August 2010
We planned our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. However, the evidence available to us was limited because we were unable to observe the counting of physical stock having a carrying amount of Rs. 5.00 Lacs and send confirmation letters to trade debtors having a carrying amount of Rs. 3.00 Lacs due to limitations placed on the scope of our work by the company. As a result of this we have been unable to obtain sufficient appropriate audit evidence concerning both stock and trade debtors. Because of the significance of these items, we have been unable to form a view on the financial statements.
CAclubindia
