Reference no: EM132807405

Britney Ltd recently signed up Marysville Ltd as a new audit client, and Catherine McLean is the audit partner. During the audit of the property, plant and equipment account, you, the audit manager, learnt that the fair value of several machines had reduced dramatically recently. The primary reason is a new technological development which is capable of reducing the processing time of such machines by 80% and therefore rendering these old machines worthless.

• Sean, Marysville's CFO, is refusing to adjust the book value of these machines. He stated that such adjustments are very time-consuming and, therefore, an expensive exercise. Marysville cannot afford to spend any money on this exercise in such challenging times.

• Sean is adamant that Marysville should continue the record these machines at the price they paid three years ago less accumulated depreciation since the purchase.

REQUIRED

Problem 1: Advise Catherine on the type of opinion that should be issued for Marysville Ltd and justify your answer.