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If there is GC issue that has been properly disclosed by management we should include a MURGC paragraph.
What if there is a GC issue that has not been disclosed? Do we include a MURGC paragraph in addition to issuing a modified opinion ?
Also, do the KAM EOM and MURGC only apply to listed companies by law?
Please see my first reply on this post https://opentuition.com/topic/undisclosed-going-concern/ in answer to your first question
Re your second question, per the IAASB, “Communication of KAM in the auditor’s report is required for all audits of listed entities conducted in accordance with ISAs.” So it is an IAASB requirement. However, in some jurisdictions, there may be laws or regulations that make KAMs a requirement for entities other than listed entities (e.g. entities in the public sector). KAM is the only part of the auditor’s report that is specific to listed entities.
so the MURGC / EOM are not requirements for listed companies ?
Regarding the modified opinion. is this where it will start that the company is not a going concern. Do you happen to have an example of this? ie modified opinion when company is not a GC.
No – they most definitely are! KAM is the only element of an auditor’s report that is required specifically for listed entities. Everything else (opinion/basis/eom/murcg/other info/responsibilities) applies to EVERY auditor’s report.
See the example in section 6 of Chapter 25 – this would be an adverse opinion.
Thanks for above.
So if there is an issue concerning GC that has not been fully disclosed by management then we will issue a modified opinion (adverse opinion) AND NO MURGC paragraph is required in the report.
And if appropriately disclosed then a MURGC should be included in report just bringing it to users attention.
For both above points only if a going concern issue arises when auditing?
Adverse only if there is sufficient evidence to disagree with management’s use of the going concern basis. If the auditor doesn’t disagree with the basis – but ‘only’ that MU has not been adequately disclosed – then qualified “except for” … [the non-disclosure].
Yes – MURGC draws users’ attention to the matter adequately disclosed.I do not understand your last point.
hi Kim,
apologies , let me clarify my question. what is the impact on the audit report and audit opinion in the below scenarios:
1.There is an issue concerning GC that has NOT been approproatley disclosed by management ?
2. There is an issue relating to the GC of the entity that HAS been appropriately disclosed by management .
3. There is an issue relating to GC. The financial statements should have been prepared using the break up basis but this was NOT done.
Thanks in advance
These are all covered on page 117 of our M/J19 notes:
1. Modified opinion (more specifically qualified “except for”)
2. MURGC
3. Adverse (see also 6. on page 124)
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