Exam (elaborations)
2021 Mock Exam 3
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Topics Covered: Evaluation of misstatements Going Concern Audit opinion
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AuditingTOPICS COVERED: Evaluation of misstatements
Going Concern
Audit opinion
AUE Integrated Question test 3
Reading time: 12 minutes
You are a manager at CA Auditors Inc. (herein referred to as CAA) a firm of
registered auditors. CAA has branches all over South Africa.
You are currently finalising the audit of Le Tour (Pty) Ltd, herein referred to as
“Le Tour” for the year ending 30 June. Le Tour manufactures and retails road
bicycles and is considered the largest manufacturer of steel road bicycles in
South Africa.
, Below is the draft statement of financial position that you have audited:
Draft Statement of Financial Position of Le Tour (Pty)
Ltd at 30 June 2019
Notes 2019 2018
‘000 ‘000
Assets
Non-Current Assets
Property, plant and equipment 24 870 25 381
Current Assets
Bank 1 835 3 294
Inventory 2 668 2 691
Trade Receivables 2 971 3 322
Total Assets 32 344 34 688
Equity and Liabilities
Capital and Reserves 2 862 3 300
Non-Current Liabilities 22 532 22 890
Current Liabilities
Trade Payables 6 950 8 498
Total Equity and Liabilities 32 344 34 688
Audit work has been performed on all balances reflected in the statement of
financial position. The following results from the audit work performed have been
documented:
Non-current assets:
Le Tour has adopted the cost model in accounting for Property Plant and
Equipment. The amount reflected in the statement of financial position is the
carrying amount at 30 June 2019. The results of the substantive audit procedures
performed on the carrying amount indicate that the carrying amount is accurate,
complete and valid. The recoverable amount at 30 June 2019 is R 24 950 000.
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