Reference no: EM132543862

Point 1: Bad Judgement Auditing Limited has been engaged by Camel Hill Real Estate Limited to conduct a financial statement audit for the financial year ending December 31, 2023. Bad Judgement Auditing Limited were required to conduct a full audit of all the operations of Camel Hill Real Estate Limited.

Point 2: The financial statements provided to the engagement partner by Camel Hill Real Estate Limited indicated that for the 2023 financial year the company (i.e., Camel Hill Real Estate Limited) had sales revenue of $241,000,000, total assets of $280,000,000, total liabilities of $95,000,00, and net income of $91,120,000.

Point 3: The engagement partner reported that in conducting the audit the audit team were not generally impeded. However, the auditors had planned to asset and evaluate all the assets reported by the firm. Due to time limitations the auditor could not review a division of the company that accounted for 1% of the total assets.

Point 4: Also, evidence collected in forming the audit opinion indicated the team discovered one of the bookkeepers had failed to include in the general journal an adjusting transaction to record a large sale of $2,500,000.

Point 5: The audit team also noted that there was a positive working capital balance of $11,000,000. The auditor, however, had recommended that $500,000 of long-term liabilities were actually due in less than 12 months. The company management, however, refused to re-categorize the liabilities from long-term to short-term.

Required:

Question 1: What type of audit opinion should be issued? Justify.