You Are an Audit Manager with Spottit & Hope

Essay

You are an audit manager with Spottit & Hope. One of your clients, Bolington Limited, has recently asked your firm to perform a limited review of the financial statements.
During your review, you discovered a cash payment of $50,000. You have asked the company for details of this payment, and the directors have told you that it was an agency
fee, and they cannot tell you any more details as the company would lose its competitive
advantage. Profit before tax is $2m.
Your audit supervisor is happy with this explanation, and has proposed a draft review
report with the following opinion paragraph:
'Based on our review nothing has come to our attention which indicates that the financial
statements do not give a true and fair view'.
Discuss the validity or otherwise of the suggested opinion, and discuss the appropriateness of alternative opinions and suggest suitable wording for the opinion you consider to be most appropriate.