Digital Valley Sdn Bhd (DVSB), a software developer, is one of the subsidiaries of Technopro Bhd
(TB). In the course of consolidating the group accounts, it was noted that the financial statement of
DVSB was modified due to inappropriate evidence obtained in relation to company's accounts
receivable.
The auditors were not able to verify the balance of account receivable of DVSB's as they did not
receive full cooperation from the management of DVSB. The account receivable makes up 30% of
the company's current assets. Due to poor documentation of audit working papers prepared by
DVSB's auditor, the group engagement partner was unable to verify the percentage of misstatement
related to account receivable.
1. Explain the audit procedures that are required to be performed by the group engagement partner in order to address the above issues
2. Explain the type of opinion to be issued by the group engagement partner for the group's financial statements.
