Auditing research paper for the Maybe It Was, But We Weren't case

Auditing for the Maybe It Was, But We Weren't case - Research Paper Example Relating to this case, the determination of the reports issued by Friday as appropriate or otherwise, has been taken into concern as a primary objective of this paper. Moreover, the significant terms associated with auditing like ‘scope limitation’, ‘limited engagement and ‘piecemeal opinion’ have also been considered and related to the case in the discussion of this paper. Most significantly, how Friday should submit the auditor’s report to the Board of Directors as on its performance for the Year 3 and Year 2 from a comparative perspective has also been considered in the discussion of this paper. INTRODUCTION The perception of audit or auditing is principally described as a procedure of verifying and examining the accounting as well as financial records of a particular company. It has often been argued that the organizations belonging to this modern day context normally conducts auditing for the purpose of adding credibility to their respectiv e financial statements resulting in analyzing along with recognizing the chief financial areas that are required to be enhanced. It has also been apparently observed in this regard that the modern organizations often attempt to prioritize auditing due to rising complexities particularly in the overall business or operational procedures and the decision-making systems (Gupta 1-2). In specific terms, the aim of this report is to analyze the approaches adopted and executed by the Certified Public Accountants (CPAs) appointed within Friday & Co (Friday) who are again bestowed with the sole responsibility of auditing the financial statements of Johnson Company. It has been viewed in this similar concern that the CPAs have audited the financial records or the statements of Johnson Company and duly expressed a sort of incompetent opinion on the balance sheet only, deciphering a degree of negligence when considering other forms of financial statements. In this regard, a balance sheet depict s a financial statement which recapitulates liabilities, shareholder’s equity and assets among others with respect to a particular company. It is often regarded as a condensed financial record or a statement that portrays the monetary position of a business entity on a specific date. The other forms of financial statements might generally embrace an income statement along with a cash-flow statement, statement concerning retained earnings as well as profit and loss statement among others (Nelson 193-194). According to the case, it has been apparently observed that the CPAs of Friday had expressed an unqualified opinion on the balance sheet of Johnson Company as on December 31, Year 2. Specially mentioning, Friday did not note the inclusion of the physical inventory as of December 31, Year 1, on the grounds that the transaction took place prior to the appointment of auditors. However, the report indicates certain critical issues or aspects related with auditing concerns. For in stance, the first aspect was mainly concerned on the reason owing to which the opinion was issued only on the balance sheet as on Year 2. The second aspect that has been recognized in this context had been concerned about judging whether the issuance of an unqualified opinion by the CPAs of Friday, only for year 2 was appropriate. If otherwise, what are the suitable ways of disclosing or reporting the case? Finally, the other critical issue that has been viewed to appear in this case scenario was concerned with the fact that is it