Reference no: EM132596795

Question - Consider the following situation. Assume that the entity referred to is a reporting entity but is not a listed entity. Grange Pty Ltd (Grange) has been a client of yours for ?ve years. It is August 20x9 and you have just completed the audit work for the year. You have concluded that Grange has prepared its ?nancial statements in accordance with the accounting standards and the requirements of the Corporations Act, except in relation to certain disclosures about property plant and equipment. When you discuss the issue with the Chief Financial Of?cer he says, "There is nothing to worry about, we have recognised the correct amount for property plant and equipment in the Statement of Financial Position- that is what the shareholders are interested in". You agree that the ?gures in the Statement of Financial Position are fairly stated. However, you believe that it is necessary for the disclosures to be made.

Required -

a) What is the critical circumstance described in the situation below?

b) Can you provide an unmodi?ed audit opinion? Give reasons for your answer.

c) If not, what two possible opinions could you provide?

d) If applicable, what is the level of materiality in this situation? Give reasons for your answer.

e) When you consider your answers to (a), (b) and (c) above, what opinion should you provide?