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bopcpa
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Joined: 23 Dec 2007
Location: Canada
Online Status: Offline
Posts: 22

Posted: 06 Jul 2008 at 12:44 \| IP Logged

TX-CPA2008
is right, auditor is not interested in opening balances of balance sheet as he can verify material balances the ending balances through substantive testing.

Whereas, for income statement you need COGS and for COGS you need biginning balance of inventory. If auditor is unable to observe beginning inventory, COGS can't be determined and the auditor will consider disclaiming opinion on income statement.

Hope this clears more...

arushi_13
Major Contributor

Joined: 09 Feb 2008
Online Status: Offline
Posts: 1235

Posted: 06 Jul 2008 at 14:40 \| IP Logged

Thanks a ton to both of u for all your help. I really appreciate it.

Thanks again.

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