In 20x7, the SML Board authorised a $2 million loan to a healthcare company set...
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In x the SML Board authorised a $ million loan to a healthcare company set up in Taiwan and operated by the daughter of SMLs Board chairman. The principal repayment date was set for March y but no interest rate was stipulated and interest has been not been charged or collected for the two years since disbursement of the funds. In January y the Taiwanese healthcare company went into liquidation. a Evaluate the significance of the loan to SMLs financial statements for the year ending December x;; b Explain the appropriate adjustments andor disclosures that should be made in the x financial statements. c Subsequent event field work and final review Evaluate the procedures that EJS Associates should perform on this matter, during the fieldwork and completion review phases of the audit. d Subsequent Event Audit Report Assess any information that should be provided in EJSs audit report in relation to the loan; Discuss any potential effect on EJSs audit opinion on SMLs x financial statements.
In x the SML Board authorised a $ million loan to a healthcare company set up in Taiwan and operated by the daughter of SMLs Board chairman.
The principal repayment date was set for March y but no interest rate was stipulated and interest has been not been charged or collected for the two years since disbursement of the funds.
In January y the Taiwanese healthcare company went into liquidation.
a Evaluate the significance of the loan to SMLs financial statements for the year ending December x;;
b Explain the appropriate adjustments andor disclosures that should be made in the x financial statements.
c Subsequent event field work and final review
Evaluate the procedures that EJS Associates should perform on this matter, during the fieldwork and completion review phases of the audit.
d Subsequent Event Audit Report
Assess any information that should be provided in EJSs audit report in relation to the loan;
Discuss any potential effect on EJSs audit opinion on SMLs x financial statements.
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