dec 2012 fuchsia enterprise co

Fuchsia:

There are going concern doubts.

If there are doubts about going concern, but the management and the auditors agree that survival is possible, the appropriate action is to disclose this in notes to the FS. There would be an emphasis of matter paragraph in the audit report to draw shareholders’ attention to this problem. If management do not disclose this problem the audit opinion would be modified because the FS ommitted a material piece of informatoin.

If there is no realistic prospect of survival, the FS should be produced on a break-up basis. If they are prepared on a going concern basis then an adverse opinoin is required because the misstatement is pervasive ie the FS are not wirth the paper they are printed on.