What opinion should given if audit materiality has been set

Reference no: EM132676164

Consider the following independent situations. In each case, assume the client is a reporting entity and that a general purpose financial report has been prepared and audited for the financial year ended 30 June 2016. For each scenario provide the type of audit opinion that should be issued and the reason(s) for your decision.

(a) The auditor believes that the provision for warranty claims has been under-provided by $125,000. The management disagrees and will not adjust the balance.

Problem (I) What opinion should be given if audit materiality has been set at $100,000?

Problem (ii) How would your answer be different if materiality was set at $200,000?

Reference no: EM132676164

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