Comment on the financial reporting implications

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Reference no: EM132995184

Question - You are the manager responsible for the audit of Marine Co, a manufacturing company with a year ended 30 September 20X9. The audit work has been completed and reviewed and you are due to issue the auditor's report in three days. The draft audit opinion is unmodified. The financial statements show revenue for the year ended 30 September 20X9 of MVR15 million, net profit of MVR 3 million, and total assets at the year-end are MVR80 million. The finance director of Marine Co telephoned you this morning to tell you about the announcement yesterday, of a significant restructuring of Marine Co, which will take place over the next six months. The restructuring will involve the closure of a factory, and its relocation to another part of the country. There will be some redundancies and the estimated cost of closure is MVR 250,000. The financial statements have not been amended in respect of this matter.

Required - In respect of the announcement of the restructuring:

(i) Comment on the financial reporting implications, and advise the further audit procedures to be Performed.

(ii) Recommend the actions to be taken by the auditor if the financial statements are not amended.

Reference no: EM132995184

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