CA. P Babu is conducting audit of financial statements of Quick Buy Private Limited.He was not able to obtain external confirmations from certain debtors due topractical difficulties and peculiar circumstances. However, such a procedure ismandated under one of Standards on Auditing.Unable to obtain external confirmations from these debtors, he relied upon saledetails to these parties, e-invoices, e-way bills and also traced payments from theseparties in bank accounts of the company. He was reasonably satisfied with auditevidence obtained. Is there any other reporting duty cast upon him relating to notfollowing a mandated procedure in one of Standards on Auditing?

Use the accompanying solution sheet to reply to the eight situations below that relate to the audit of financial statements of nonpublic companies. Unless indicated otherwise, assume that material amounts are involved. Do not consider including an emphasis-of-matter paragraph in an "auditor discretionary" circumstance. Situations: A company has departed from GAAP. A company's inventory records were deficient and the auditor was required to satisfy herself that the inventory was properly stated using alternative procedures. She is satisfied that she has sufficient appropriate evidence. In auditing a client, an auditor has determined that substantial doubt exists about an entity's ability to continue as a going concern. A group auditor decides not to take responsibility for the work of the component auditor who audited a 70% owned subsidiary and issued an unmodified opinion. The total assets and revenues of the subsidiary are 5% and 8%, respectively, of the total assets and revenues of the entity being audited. A company changes from FIFO to LIFO for inventory valuation and the auditor concurs with the change. The change has a material effect on the comparability of the entity's financial statements this year, but is expected to have an immaterial effect in the future. Inadequate record retention policies by the client have resulted in a situation in which a CPA is unable to obtain sufficient appropriate audit evidence with respect to a material account. A CPA has decided to emphasize in the audit report that the company she audited is a component of XYZ Company, its parent. A client has changed its estimate of likely doubtful accounts from 2% of credit sales to 3%. The auditor believes the change to be reasonable. Reply as to the type of opinion and other modification to the audit report as follows: A. Adverse D. Disclaimer Q. Qualified U. Unmodified Other Modification EOM Add an emphasis-of-matter paragraph. OM Add an other-matter paragraph. BFM Add a basis for modification paragraph. OTHER Make modifications other than adding an additional paragraph. NONE Make no modifications. If more than one type of opinion is appropriate list each—one with "Report 1" and one with "Report 2." If only "Report 1" is appropriate, place an X in the "Report 2" Opinion Type cell, which indicates no second type of report is appropriate. Situation Opinion Type Other Modification BEM BEM NONE 1 A U 2 X EOM 3 D BEM OTHER U 4 Report 1 Report 2 Report 1 Report 2 Re I Don't Know If My Answers Are Correc

The following information relates to Babu Services for August 20.19:         BABU SERVICES1.      BANK RECONCILIATION STATEMENT AS AT 31 JULY 20.19 Unfavourable balance per bank statement………………………………………………R(4 375)Deposit not yet credited……………………………………………………………………16 720Favourable balance per bank account………….………………………………………..? 2.      The bookkeeper received the bank statement for August after the August cash journals were totaled. On comparing it with the August cash journals the following items did not appear in the cash journals:BANK STATEMENT FOR AUGUST 20.19DetailsDateDebitCredit Deposit ………….…………………………………………… 01/08R R16 720Stop order - Insurance………………………………………..................17/082 250 Service fees……………………….………………………….Interest………………………………………………………..EFT PR P831….……………………………………………..Debit order – City Council…………………………………..26/0826/0826/0827/08700 6752 550 105 Additional information regarding the bank statement received on 31 August 20.19.2.1    EFT PR P831 was made in favour of a creditor, I Moloi. The amount was incorrectly entered in the cash payments journal as R765.2.2    The debit order in favour of the City Council was for the owner’s private water and electricity account.2.3    On 31 August 20.19 the bank statement showed a credit balance of R2 765.3.      A deposit for R14 750 appeared in the cash journals, for August 20.19, but not on the bank statement for the same period:          4.      Provisional totals at 31 August 20.19 was:                                                                                                                                                                                            RCash receipts journal                                                                                                          57 175Cash payments journal46 700Prepare the bank account in the general ledger of Babu Services, properly balanced, at 31 August 20.19.Instructions:Drag the correct answer into the correct space.An option can be used more than once.If an options has been provided and it is not applicable to the specific questions please put N/A in the accounts column and a 0 in the amounts column.Start with the subtotals and thereafter keep the transactions strictly in the order they were given.blank blank blank blank blank blank blank blank blank blank BalanceTotal receiptsTotal payments67 84512 3457 17557 28057 26564 54569 71552 30557 17546 70057 85010 47552 9654 3752 76552 20017 51515 64552 29057 370

The auditor should obtain evidence that management acknowledges its responsibility for the fair presentation of the financial statements in accordance with GAAP in the Philippines, and has approved the financial statements. The auditor can obtain evidence of management's acknowledgment of such responsibility and approvalI. From relevant minutes of meetings of the board of directors or similar body.II. By obtaining a written representation from management.III. By obtaining a signed copy of the financial statementsSelect one:a.None of theseb.I onlyc.Any of thesed.Either I or II

The financial statements subject to audit are those of the entity, prepared and presented by external auditors of the entity with oversight from the managementSelect one:TrueFalse

The external auditor’s responsibility regarding a Corporations Act financial statements audit is to:   a.Provide absolute assurance that there are no material misstatements due to fraud or error in the financial report.  b.Provide limited assurance that there are no misstatements due to fraud or error in the financial report.  c.Provide absolute assurance that there are no misstatements due to fraud or error in the financial report.  d.Provide reasonable assurance that there are no material misstatements due to fraud or error in the financial report.  e.Provide reasonable assurance that there are no misstatements due to fraud or error in the financial report.