Auditor’s Report Case Study Solution
Auditor’s Report
To the shareholders and the board of director
Financial Statement Report
The Graham Company’s financial statements have been audited by the team of auditors which includes the company’s 2018 profit/loss statements and the balance sheet 2018. The year-end statement of cash flows in addition to some of the GAAP accounting policies and various explanatory information has been identified and summarized.
Responsibility of the Management regarding the financial statements
In accordance with the Generally Accepted Accounting Principle (GAAP), the managing team is responsible to provide well prepared, fairly presented financial statements. It has to make sure that there are no material misstatement when preparing the financial reports either due to error or fraud.
Responsibility of an Auditor
As an auditor it’s my responsibility to convey my just opinion after auditing the financial statements. The generally accepted standards on auditing are applied when conducting the company’s audit. Auditors make sure to follow the standards of ethical requirements and hence look forward to perform our best to prepare the financial statements free from any kind of material misstatement. .
A well prepared audit requires steps and procedures to come up with evidences about the disclosure amount in the financial statements. The audit presentations are prepared after the auditor’s thorough risk assessments. It also examines the accounting policies used by the entity and discusses the reasons of accounting estimates implemented by the Graham Company’s management. Furthermore, financial statements presentations are evaluated at the end of the audit.
The audit evidences collected by us are appropriate and can be sufficient for our opinion and ideas on the financial statement.
Basis for Adverse opinion
The Graham Company has deducted implicit tax of 33% and the amount mentioned is $400,000, however after calculation the exact amount should have been $469,000. The company hasn’t stated the correct amount of land and as such it has affected the portion of total assets. The situation has shown that there is presence of material uncertainty and may impose doubts over company’s future business course.
Adverse Opinion
As per analysis, the reasons for adverse opinion has been discussed in the section of basis for adverse opinion. It can be clearly seen that the financial statement doesn’t represent a fair presentation of Graham Company’ financial as of period December, 31, 2018, along with the cash flow statements that are in accordance with Generally Accepted Accounting Principle.............
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