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Calculate the current ratio from client financial statements

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Reference no: EM132685210

Audit report

Question a. Your client is a public company engaged in the property business. Their inventory accounts consist of real estate units and unsold apartments; the amount of material. After being audited, you find that some of the real estate units are overstated. The client agrees to resolve the problem by restating their financial statements.

Question b. When you calculate the current ratio from your client's financial statements, you find that current assets are only 10% of your client's current liabilities. But all financial reports are presented in accordance with accounting standards.

Question c. You discover that your client is involved in the law in a dispute over non-current assets. According to the results of your investigation with the client's attorney, you find that it is possible that the client will lose out on future court decisions. But the client refuses to reveal this contingent even after you have convinced them.

Reference no: EM132685210

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