Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

Euan served as the external auditor for Z Limited.
(a)[4]

Explain how the role of an external auditor differs from the role of an internal auditor in a limited company.

(b)[8]

Recommend the accounting treatment for information 1, 3, 5 and 6 in the financial statements.

(c)[3]

Calculate the revised profit for the year ended 31 December 2016 after applying your recommendations in (b).

(d)[4]

Prepare the statement of changes in equity covering the year ended 31 December 2016.

(e)[3]

Prepare the redrafted statement of financial position as at 31 December 2016.

(f)[3]

Discuss the actions Euan should take if the directors fail to amend the financial statements.

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