a. State the prescribed circumstances in which an auditor under the Companies Act is required to qualify his report.
b. The report of the auditor on the annual accounts of a limited company contains a “except for” qualification. Comment briefly on this form of qualification.
You are the auditor of a company whose financial year-end was 30 September 1992. A note tothe accounts states “the loan of Shs.20 million included in the balance sheet is repayable on 31 December 1992 and negotiations are currently in progress with the company’s bankers for replacing the loan with a new long-term facility”.
The company’s cash flow projections show that no funds are available to repay the loan, but negotiations with the company’s bankers are well advanced. The outcome of these negotiations however will not be known by December, the date on which you will be required to sign your audit report.
You are required to draft an audit report appropriate to the above circumstances. (22 marks)
a. Under the provisions of CA the auditor is required to make certain disclosures in his audit report. Briefly describe these provisions. (10 marks)
b. Name 4 types of audit opinions, which the auditor may express in his report indicating the circumstances under which each can be issued. (10 marks)