1. If there is no uncertainty regarding client going concern, under KAM we need to include a going concern paragraph states that it is going concern, am i correct?
But KAM is only required for listed company, so where the auditor should disclose the going concern paragraph in audit report?
2. If there is uncertainty regarding going concern but client assumption is appropriate and sufficient disclose, we still need to include one MURGC paragraph, and state that the entity is going concern, this statement "entity is going concern"should include in MURGC or KAM?
Thank you.
Ask the Tutor ACCA AAA
Going concern
Please take a look at OpenTuition's AAA notes - Chapter 23.
1. I don't know where you got this idea from - going concern is only every referenced in the auditor's report if it is an issue. (See page 111 of the notes).
2. Yes the MURGC para will be included BUT the auditor's report will NEVER include a statement "entity IS a going concern" - so the answer to the second part of your question is that it is not included anywhere(!) Again, I don't know where you got this idea from.
Thanks for the reply,
I would also like to know if it is 'certain' that the firm is not going concern, what we should do for the audit report?
MURGC is not applicable because there is no 'uncertain' right?
Is it mention at emphasis of matter that the firm financial statement is prepared using break up basis.
Correct.
If the company is not a going concern but the financial statement are prepared on a going concern basis (inappropriately) - the audit opinion must be adverse.
If the financial statements are properly prepared on a liquidation/break-up basis with adequate disclosure, etc - the audit opinion may be unmodified but an EoM would probably be necessary to draw the user's attention to the alternative basis of accounting and reasons for its uses (as adequately disclosed in the notes to the financial statements).
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