Implications of Client's Financial Struggles on BBBEE Verification Engagement Assignment

Assignment Task

Questions

1. You have been appointed as the manager on a verification engagement. During your initial meeting with the new client you realise that:

• The new client is planning to use the BBBEE certificate as part of a major tender application
• The client has been struggling financially and they are hoping to turn things around through the successful tender application
• The new client’s auditors issued an unqualified audit opinion for the period under review

Explain the implications of your understanding of the client’s circumstances on your BBBEE verification planning process and your approach to entering into an engagement with the new client.

2. You have been appointed as a verification professional to issue a BBBEE certificate for Beeright.

Ltd. The company does not have audited financial statements and have provided you with management accounts for the previous 12 months.

1. a) Explain whether, how and why your approach to the verification engagement will be different when using management accounts rather than audited financial statements during the planning, and execution of the BBBEE engagement.

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