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If there is material uncertainty about the going concern but it is adequately provided in the financial statement , in this case unmodified opinion should be issued right? Previously in this case, EOM paragraph would be placed immediately after the opinion paragraph but due to the revised ISA 570, the section headed ‘Material Uncertainty Related to Going Concern’ is included immediately after the Basis for Opinion paragraph . So, is it mean that no EOM should be put in this case but instead, Material Uncertainty Related to Going Concern should be placed in the audit report?
The course note page 57 “Where the auditors consider that there are doubts over whether the entity is a going concern, they would wish to see additional disclosures in the financial statements. If appropriate disclosure is given and the auditors do not disagree with the use of the going concern basis, then the audit report will be unqualified with an additional
“emphasis of matter” paragraph.”So the “emphasis of matter” paragraph should be corrected to Material Uncertainty Related to Going Concern paragraph right?
How about if the financial statements is prepared on break up basis? The Auditor’s report should be modified with unmodified opinion with “Other Matter” paragraph right?
This seems to me to be a situation where the matter is a key audit matter and therefore the auditor is prevented from using either an “emphasis of matter paragraph” or an “other matter paragraph” to draw the attention of the reader to it
I agree that we could be facing an unqualified opinion but I see the inclusion of a KAM paragraph to modify the report
Means that if “EOM paragraph” or “other matter paragraph” and KAM paragraph is mutually exclusive? if KAM does appears in the auditor’s report then the “EOM” or “other matter paragraph” would not be possible to be included in the auditor’s report?
Again, that’s how I interpret the standards – an EOM or OM is not to be used as an alternative to a KAM
Alright. Again the course note page 57 “Where the financial statements are prepared on a break-up basis, and the auditors agree with this basis, the audit report should be modified with an “emphasis of matter” paragraph.”
So in this paragraph, the EOM paragraph should be corrected to key audit matters paragraph right?
I’m sorry but I didn’t read anything about KAM paragraph within the exam kit. What is it and when should be used?
It’s in there in the course notes
It’s the abbreviation for a Key Audit Matter and it’s a requirement that the auditor includes within the audit report those matters of such great importance that the auditor came across during the course of the audit
The article highlighted in this thread is worth a read!
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