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Audit Opinion

1) The auditor issued a qualified opinion on Sheren International Trade Private Limited Company's financial statements due to two issues: an owner's loan of 2.2 million birr that lacked supporting documentation, and a vehicle that was capitalized at 5.9 million birr but had an invoice of 3.3 million birr. 2) Management is responsible for preparing the financial statements accurately while the auditor is responsible for obtaining evidence to form an opinion on whether the statements are fairly presented. 3) The auditor conducted the audit in accordance with international standards and identified issues with unsupported amounts as key audit matters.

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79 views3 pages

Audit Opinion

1) The auditor issued a qualified opinion on Sheren International Trade Private Limited Company's financial statements due to two issues: an owner's loan of 2.2 million birr that lacked supporting documentation, and a vehicle that was capitalized at 5.9 million birr but had an invoice of 3.3 million birr. 2) Management is responsible for preparing the financial statements accurately while the auditor is responsible for obtaining evidence to form an opinion on whether the statements are fairly presented. 3) The auditor conducted the audit in accordance with international standards and identified issues with unsupported amounts as key audit matters.

Uploaded by

melaku
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MELAKU TAMIRU CHARTERED CERTIFIED ACCOUNTANT (UK) AND CERTFIED

AUDITOR (ETH)

MELAKU TAMIRU Certified Audit Firm.


22 Mezoria Quality Building, 4th floor,
Office No 405. Bole Sub City, Woreda 04
Addis Ababa, Ethiopia.
Tel: +251 (913) 22 17 61 or +251(911)0605123
E-mail: [email protected]

INDEPENDENT AUDITORS' REPORT TO SHEREN INTERNATIONAL TRADE


PRIVATE LIMITED COMPANY

Qualified Opinion

We have audited the financial statements of Sheren International Trade Private Limited
Company as set out on pages 4 to 12, which comprise the Balance Sheet as of 7 July 2023, and
the Income Statement, Statement of changes in Equity and the Statement of Cash Flows for the
year ended 7 July 2023 and the notes to the financial statements, including a summary of
significant accounting policies.

In our opinion, except for the effects of the matter described in the basis for qualified Opinion
section of our report, the accompanying financial statement presents fairly, in all material
respects, the financial position of the Sheren International Trade Private Limited Company and
its financial performance and its cash flows for the period ended 7 July 2023 in accordance with
Generally Accepted Accounting Principles and the requirements of the Commercial Code of
Ethiopia, 1960.

Basis for Qualified Opinion

1. The owner’s loan of Birr 2.2 million was not supported by an agreement or a
management minute.
2. The filed supplier invoice for the vehicle purchased stated Birr 3.3 million, while the
vehicle was capitalized for Birr 5.9 million.

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the entity in
accordance with Accounting and Auditing Board of Ethiopia Code of Professional Conduct for
Registered Auditors (AABE Code), which is consistent with the International Ethics Standards
Board for Accountants Code of Ethics for Professional Accountants (Part A and B), together

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with other ethical requirements that are relevant to our audit of the financial statements in
Ethiopia, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance
in our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters. In addition to the matter described in
the Basis for Qualified Opinion section we have determined the matters described below to be
the key audit matters to be communicated in our report.

Responsibilities of Management for the Financial Statements


Management is responsible for the preparation and fair presentation of the financial statements in
accordance with Acceptable Financial Reporting Practices, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error. In preparing the financial
statements, management is responsible for assessing the Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but
is not a guarantee that an audit conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also: -
 Identify and assess the risks of material misstatement of the financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

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 Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company's internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the Management.
 Conclude on the appropriateness of the Management's use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue
as a going concern.

We communicate with management regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

MELAKU TAMIRU Certified Audit Firm


(Auditor of 7 July 2023)
8 November 2023
Addis Ababa

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