Reference no: EM132972404

Question - You are also the audit manager for two audits which are nearing completion and the auditor's reports are due to be signed next week. Both clients have a year-end of 31 March 20X5. The following issues have been left for your attention. Vale Co The Chair's report of Vale Co states that investment property rental forms a major part ofrevenue. However, a note to the financial statements shows that property rental represents only 1.6% of total revenue for the year. The audit senior is satisfied that the revenue figure in the financial statements is correct. The audit senior has proposed an unmodified audit opinion as the opinion does not extend to the Chair's report.9 Zenta Co Procedures on the audit of Zenta Co identified a transfer of cash from Harman Co 15April 20X5. The audit senior documented a discussion with the finance director of Zenta Co, who explained that Blush Co commenced trading on 4 April 20X5, after being set up as a wholly-owned subsidiary of Zenta Co. The audit senior has proposed an unmodified opinion because the matter does not impact on the current year's financial statements.

Required - Using practical examples of modified audit reports, critically appraise the audit senior's proposals for the auditors' reports of Vale Coand Zenta Co.