Explain how the situation would affect the audit

Reference no: EM133537887

Question: Analyse and explain how the following situation would affect the audit report for the financial year ended on 30 June 2023, assuming you are the engagement audit partner of Mining Ltd. In your analysis, please include 1) the condition and elaborate why the condition is relevant to the case, 2) a discussion about the impact on the financial report, and 3) the appropriate type of audit opinion. (5 marks)

During the audit for Mining Ltd, the auditors determined the company's exploration expenditure of 4 million should not be capitalised according to accounting standards. However, when the auditors approached the client, the client insisted on capitalising the expenditure. The materiality of the financial statements is $3.5 million.

Reference no: EM133537887

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