Goods Pty Ltd's financial report shows a profit increase of 20% on the previous year. The chairman's report in Goods Pty Ltd's annual report boasts of a 50% increase in profit from the previous year. The auditor's report should include:

Question

Quizplus · Accepted Answer

The auditor's report should include an emphasis of matter section to draw attention to the discrepancy between the chairman's report and the financial report. The 50% increase in profit stated by the chairman may have factors, such as non-recurring income, that were not considered in the financial report's 20% increase. It is the auditor's responsibility to ensure that the financial report accurately represents the company's financial position, and the emphasis of matter section will inform readers of the potential misinterpretation.

Goods Pty Ltd's Financial Report Shows a Profit Increase of 20