Where's The Logic?

I had a smooth sailing at work yesterday. Maybe the thought of a public holiday nearing made my heart happier.

My audit manager nearly got me into trouble again, but I was able to ride myself out of the mess. It ended up he got a nasty scolding from my boss as he failed to use his logical thinking. Just to share with u all what actually happened?

As some of u may know that nowadays companies' financial reports may not be audited unless:-

1. As required by certain government authorities for bidding of project purposes
2. Turnover in excess of S$5m
3. Corporate shareholders in company.

The client had previously requested for its accounts to be unaudited as they wanted to save cost. Recently, they had wanted to bid for a project by the government. Therefore, as mentioned above, the accounts had to be audited for the past 2 years. Since the accounts for FY 2005 & 2006 has been compiled into an unaudited report, what will u do if u were the auditor of the company?

1. Do a seperate audit and pass some audit adjustments and present a different set of figures in the report, when the original unaudited report has been submitted to ACRA and IRAS?
2. Use the same unaudited report, just slot in the audit report to the relevant sections?

The correct answer should be (2) as IRAS will definitely query on the different figures. They may treat the company as wanting to evade tax and penalise the company and a company should have only 1 set of report for all authorities.

Fortunately, the client had highlighted the issue to me when she received the YA 2007(FY 2006) income tax return. I just want to check the audit working files and told my boss what happened? What followed was a barrage of scolding for the manager.

I wonder where was his logic & common sense when he did this?

I went to visit my grandma after work. It was good to see that she is able to talk to us yesterday. I just hope that she can check out of the hospital soon.