Audit and assurance (C2) revision question on assessment of misstatement (NBAA MAY 2017)

In the course of new audit of large established limited company, trading as multiple grocers you discover that no entry has been made for rents payable accrued to the date of statement of financial position. You are told that it is not the company’s practice to make these accruals and that it is unnecessary to do so as the accounts for the year include a full years charge. You subsequently ascertain that rates paid for a period extending beyond the end of the accounting year have not been carried forward in the statement of financial postion but the statement of profit and loss contains twelve month charge.

REQUIRED:

state the considerations that would determine your action in these circumstances

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