When a customer invoice is included in the sales ledger, and it is known that the customer is in liquidation. This in the only entry in relation to this transaction and it is regarded as material. Which audit report would you issue:

Question

Quizplus · Accepted Answer

An "except for" report is issued when the financial statements present fairly in all material respects, except for a material misstatement that does not pervade the financial statements. Including an invoice in the sales ledger for a customer in liquidation without making any provision for bad debt or disclosing the risk could mislead the financial statement users about the company's financial position, warranting an "except for" opinion.

When a Customer Invoice Is Included in the Sales Ledger