Imagine the following independent sets of circumstances

Reference no: EM131046851

Limitation on Scope Lorts Corporation of Maastricht, the Netherlands, (whose fiscal year will end December 31, 20X3) informs you on December 18, 20X3 that it has a serious shortage of working capital because of heavy operating losses incurred since October

1, 20X3. Application has been made to a bank for a loan, and the bank's loan officer has requested financial statements. The management of Lorts Corporation requests a meeting with you. You try to imagine the following independent sets of circumstances.

1 Lorts asks that you save time by auditing the financial statements prepared by Lort's chief accountant as of September 30, 20X3. The scope of your audit would not be limited by Lorts in any way.

2 Lorts asks that you conduct an audit as of December 15, 20X3. The scope of your audit would not be limited by Lorts in any way.

3 Lorts asks that you conduct an audit as of December 31, 20X3 and render a report by January 16. To save time and reduce the cost of the audit, it is requested that your examination not include confirmation of accounts receivable or observation of the taking of inventory.

4 Lorts asks that you prepare financial statements as of December 15, 20X3 from the books and records of the company without audit. The statements are to be submitted on plain paper without your name being associated in any way with them. The reason for your preparing the statements is your familiarity with proper form for financial statements.

Required:

Indicate the type of opinion you would render under each of above set of circumstances. Give reasons for your decision.

Reference no: EM131046851

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