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Hi,
If a matter is so significant, such as a litigation possibly creating a huge liability, that has been disclosed adequately in the accounts, and an emphasis of matter provided in the audit report due to its significance, what would be the implications in the audit report for the going concern? This is a significant issue that creates an uncertainty to going concern, is a material uncertainty to going concern paragraph appropriate?
Following on from your previous post – a “matter” can only be dealt with in one place.
By definition, an EoM is “of such important that it fundamental to the users’ understanding of the financial statements”. What the EoM is saying to users is “read me before you try to understand the financial statements”. So litigation (or regulatory action) would have to be quite exceptional to be worthy of an EoM.
If litigation, exceptional or otherwise, creates material uncertainty about going concern it will be dealt with as a MURGC – if adequately disclosed, there will be MURGC section, if not adequately disclosed, the audit opinion will be qualified.
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