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Hi
I have just read through your Chapter 6 notes. I went through the lecture this time last month. I did the practice test questions just now after reading and scored an abysmal 16%
I am finding it difficult to take this in and particularly the majority of questions surround ‘going concern’, do you have any advice on how to improve my knowledge in this area other than repeating the lecture?
Thanks
If there is doubt about going concern, this should be mentioned in a note to the FS.
If the note is not there, the FS do not show a T&F view and the audit opinion has to be modified, probably an ‘except…for’ qualification.
If the note is there, the audit report would be modified (no change to the opinion) by adding an emphasis of matter paragraph to draw users’ attention to the note.
[If there is no realistic prospect of the company surviving the FS should be produced on a break-up basis]
Ok in the last instance, break-up basis, what opinion is formed if it wasn’t being disclosed at all or is it adverse?
If the FS were prepared on the going concern basis and the auditors thought this was wrong, then the audit opinion would be adverse.
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