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Questions -
I. Kent Ltd is an Australian wine producer that is well known for their commitment to sustainable production and continuous improvement. The Kent Ltd has capitalised significant funds incurred in developing an improved new wine cap that allows the wine to continue to develop in the bottle. On 19 July, Kent Ltd applied for a patent for the cap, only to discover that a competitor had lodged a similar application on 15 June. The granting of Kent Ltd's patent application is now in serious doubt. Management do not believe any change to the financial report is required. What type of auditor's report should you issue? Explain the reason for your answer.
II. The entire Victoria operations of the company are under investigation by the Australian Tax Office for alleged failure to pay the appropriate amount of PAYG tax. As auditor, your preliminary investigations reveal that the Tax Office has a strong case against the company. However, there is no note to financial report regarding this issue. What type of auditor's report should you issue? Explain the reason for your answer.
III. The auditor of MIA insurance Ltd hires an actuary to assist in corroborating a client's complex superannuation calculations concerning accrued superannuation liabilities that account for 40 percent of the client's total liabilities. The actuary's findings are reasonably close to the client's calculations and support the financial report. What type of auditor's report should you issue? Explain the reason for your answer.
Direct write-off method - Journalize the following transactions using the direct write-off method of accounting for uncollectible receivables
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