State what type of opinion should be issued on the company

Assignment Help Financial Accounting

Reference no: EM13133514

A. Grinner and Greeter, CPAs, were engaged to perform an audit of the financial statements of Happy, Inc. Happy's management would not allow Grinner and Greeter to confirm any of the accounts receivable. All other auditing procedures were performed as considered necessary by Grinner and Greeter and no problems were found. However, Grinner and Greeter were unable to satisfy themselves with regard to the balance in accounts receivable.

B. Tick and Tie, CPAs, were performing their annual audit of Johnson Manufacturing Company. Johnson is currently being sued for $2,000,000 related to an alleged defective product that they sold to a customer. Johnson's legal counsel has told Tick and Tie that it is probable that Johnson will lose the suit and have to pay the entire $2,000,000. Johnson's management has included information in the footnotes about the lawsuit. However, they have not recorded any loss or liability in income statement or balance sheet.

Required:

For each of the independent situations presented above, state what type of opinion should be issued on the company's financial statements. Briefly explain your rationale. Finally, state which paragraphs, if any, of the standard report would be modified.

Reference no: EM13133514

Questions Cloud

Calculate cost of goods available for sale : Calculate the cost of goods available for sale and the units available for sale for this four-week period.

What adjusting entry must sue make : Sue Smiley has performed $500 of CPA services for a client but has not billed the client as of the end of the accounting period. what adjusting entry must Sue make?

Find probability that part can be assembled in seven minutes : The time required to assemble a part of a machine follows an exponential probability distribution with a mean of 14 minutes. What is the probability that the part can be assembled in 7 minutes or less?

Compute the predetermined manufacturing overhead rate : Actual hours worked were 195,000 and actual overhead was $978,000. Compute the predetermined manufacturing overhead rate. Compute the applied manufacturing overhead.

State what type of opinion should be issued on the company : For each of the independent situations presented above, state what type of opinion should be issued on the company's financial statements. Briefly explain your rationale. Finally, state which paragraphs, if any, of the standard report would be mod..

Find probability that committee will contain no member : At the school there are eight tenured faculty members in accounting. What is the probability that the committee will contain: None of them?

Compute conrad itemized deductions : Conrad, who is single, had agi of $361,850 during the year. He incurred the following expenses and losses during the year:

Determine the amount of cost of goods sold : On January 1, 2001, raw materials inventory included direct materials with a cost of $20,000. During the year, the firm purchased direct materials costing $50,000. At year-end, the account included direct materials, with a cost of $5,000.

How do you think s & s airs ratio would compare : Suppose you create an inventory ratio calculated as inventory divided by current liabilities. How do you think S & S Airs ratio would compare to the industry average.

User Account

All Pages