Audit Guidance Statement - Essay Example

Those that lack sufficient evidence to enable judgment are the disclaimers.

The Hawke’s Bay Cultural Trust is one of the firms that received a non-standard audit opinion on the year beginning on April 1st, 2004, and ending on March 31st, 2005. It got a full adverse opinion on 30th June 2004. The purpose of receiving this stance is the trust failed to recognize the whole value of its compendium of assets. It also had no idea of the concomitant expense in depreciation in its financial records. These misdoings go against the third standard of financial reporting i.e. accounting for the plant, equipment, and property. It expects business entities to recognize the asset collections not achieved before to be recognized at reasonable value without forgetting to depreciate it (Audit Guidance Statement 14).

The Trust is a corporation that specializes in the management of all issues concerning heritage, culture, and arts in an assimilated region. Its role is to provide services in the fields of heritage, culture as well as art, and related programs to those residing in Hawkes’s Bay. It also provides education and information to the Hastings District community in its areas of specialty among other roles

Attached is a copy of the audit report to the readers of the Hasting community for the year that ended on thirtieth June two thousand and four. The company received a disclaimer because the liquidity levels were much higher than expected, resulting from an increase in surplus coupled with the degree of labor brought forward to the year 2004/05. Secondly, the present portion of term indebtedness of two million U. S dollars exceeded the long-term financial strategy budget. There were capsizing finances as a consequence of the decision to utilize internal borrowing to avoid the creation of more sinking funds  (Audit Guidance Statement 54).

The revaluations that took place in the year two thousand and three and in the year two thousand and four events to a monumental escalation in asset value. Lastly, there was very little external liability because of the verdict to turn to internal loaning. As aforementioned, were it not for the failure of the trust to adhere to the third standard of financial reporting, the audit would be able to reflect the financial position of the board as well as the outcomes of its functions.

In a nutshell, audit reports are prepared for parties interested in the financial as well as non-financial Intel of a firm. Nonetheless, public corporations are expected to answer to parliament since they use public funds, among other statutory influences dispensed to them by the government body. It is therefore vital that parliament be notified of all issues eventing in non-standard audit reports.