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Hello Sir,
In the third set of flashcards there is a question relating to going concern doubts asking
“What sort of audit report should be issued if going concern doubts are not fully disclosed in the financial statements?”
with the answer being
“The audit report will be qualified because the financial statements contain a material misstatement by not disclosing the going concern problem.”
My question is as going concern doubts would be deemed a pervasive issue would an adverse opinion not be more appropriate?
Thanking you,
johnIf the matter is pervasive then, by definition, the opinion has to be adverse. The flashcard used ‘qualified’ in a more colloquial sense than it should have. Often the term ‘qualified’ is often used to mean any sort of modified opinion, but in an exam you have to be more precise.
Apologies. We’ll correct it.
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