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I READ TECHNICAL ARTICLE ON GOING CONCERN BY F8 TEAM.
IS THIS ARTICLE NOT UPDATED PROPERLY?
WHY THEY ARE SAYING DISCLOSE UNCERTANITY OF GOING CONCER ASSUMPTION IN EOM AND SO MANY OTHER THINGS CONFLICT WITH BPP TEXT.
THANKS…
can anyone please reply…@alchemist plz guide me…I find your answers more logical…
Yeah that article is quite old and is based on the old standards.
However, they issued a new technicle article ‘The new auditors report’ which addresses your issue and clarifies that in case of a going concern scenario an unmodified opinion with a modified report that includes a material uncertainty related to going concern paragraph.
@saifoo786 said:
Yeah that article is quite old and is based on the old standards.However, they issued a new technicle article ‘The new auditors report’ which addresses your issue and clarifies that in case of a going concern scenario an unmodified opinion with a modified report that includes a material uncertainty related to going concern paragraph.
this is not properly addressed.
if material uncertainty as to going concern assumption exist and properly disclosed in audit report we add para”material uncertainty as to going concern”
if material uncertainty as to going concern assumption exist and not properly disclosed audit opinion will be qualified or adverse as going concern assumption always have pervasive effect in my opinion it should be adverse…please correct me.and in this case only basis for qualified or adverse opinion become part of audit report….
if going concern assumption is inappropriate then disclaimer of opinion and reason for disclamer of opinion will be explained.
Okay I’ll clarify by providing you all the possible scenarios:
In the case of the company not being a going concern and has prepared the FS on the break up basis and made adequate disclosure of this fact then the auditor will issue an unmodified opinion with a modified report and a ‘Material uncertainty related to Going Concern’ paragraph.
If a material uncertainty exists but has not been disclosed then a modified either qualified or adverse opinion will be issued depending on whether it is material or material and pervasive respectively. A basis for modified opinion will be given explaining the going concern issues management have failed to disclose.
If the company is not a going concern and has prepared the FS on the going concern basis then the opinion will be adverse as it is pervasive and a modified report with a basis for adverse opinion explaining the going concern issues management have failed to account for properly.
If the period assessed by management is less than twelve months from the FS and management is unwilling to extend the assessment then the auditor will issue a qualified or disclaimer of opinion due to the inability to obtain sufficient appropriate audit evidence and a basis for modified opinion.
Thanks
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