Lecture 8- Going concern & audit opinion

Going concern assumption- Entity is to continue in for future

Financial statements are prepared on basis because measures based on values tend not to be to users & likely to be valued at than basis if it is going to continue

Auditor must focus on throughout audit & not just at

ISA 570 requires to consider same period in as management provided more than months from balance sheet . If lower auditor requests to extend period of assessment. Auditors need to get months of data from to review so that they can see approval of financial statements. Where directors look at period of than one year from approval of financial statements determine whether disclosure required. If directors do not disclose auditors must disclose it in . Auditors must remain to possible conditions beyond months. There might be change of circumstance

need to be recognised because they need to also determine if company is . also need to be recognised as they need to satisfy themselves basis is appropriate, in financial statements are , how concluded company is & finally assess , & of information used in coming to conclusion

Information to assess going concern include forecast, forecast, forecast & of forecasting

Two indicators that might suggest that company is having going-concern problems are company is generating & company has made

Another two indicators that might suggest that company is having going-concern problems are company has which it is having trouble & company has

Another two indicators that might suggest that company is having going-concern problems are company's major are in & company has had to

Another two indicators that might suggest that company is having going-concern problems are company has its & company is taking time to pay

Another three indicators that might suggest that company is having going-concern problems are company has made number of , company is in & company has been forced to sell some of its

If there is no doubt in going concern of company, neither nor need refer specifically to going concern in or (ISA 570)

If there is doubt in going concern of company, will consider if have included sufficient disclosures such that financial statements give & view. If so, they need not issue qualified , even where there is fundamental , but include an paragraph on going-concern problems, referring to note disclosure in

Audit report- ISA 700 says it is auditor’s report on . Auditor should & conclusions drawn from obtained as basis for expression of an opinion on

Unmodified audit opinion- Auditors are accounts give & view & with legislation

Modified report but unmodified audit opinion- (paragraph in audit opinion). This draws user's attention to specific that is to their understanding

Contents of unmodified audit report include , of statements upon which are , of those involved in (both auditors & client), of audit, i.e. conclusion, & of auditors & finally of audit report

For identification of statements auditors must identify information upon which they are & that information not audited does not with view given by

Auditors state their to form an on financial
statements in accordance with - of audit

Directors’ responsibilities include of financial statements that give & view, of appropriateness of assumption & ensuring entity keeps proper

Auditors express an & not . is directed towards two matters & they are of accounts & with Companies Act 2006

Auditors ensure comply with Companies Act 2006 by ensuring state whether have been prepared in accordance with applicable & where there is departure from , reasons for departure & effect should be

Examples of items that would be included emphasis of matter paragraph are relating to future outcome of exceptional (process of taking action), early of new standard & major that had (or still has) effect on entity’s

Modified audit opinion- There are matters contained in where auditors are not completely . It is also known as . could be because of limitation in audit & auditors’ with treatment or disclosure

Type of modification depends on “”. is term used to describe on financial statements of or undetected (due to inability to obtain) . It is if: not restricted to specific or in financial statements, restricted to specific or items that represent portion of financial statements & relates to which are fundamental to users of financial statements

One type of qualification is . For items that are but not pervasive there is (except for) opinion. For items that are & there is opinion

Another type of qualification is . For items that are but not there is (except for) opinion. For items that are & there is of opinion

Limitation of scope- are unable to obtain appropriate

Disclaimer opinion- Possible effect is so or that they cannot form an otherwise except for

Examples of limitation in scope are loss of , loss of , unable to attend & client does not permit to be sent to relevant

Disagreement- form an opinion on specific matter that from opinion of

Adverse opinion- When effect of disagreement is so or that financial statements are seriously – not view

‘Except for’ opinion- Where disagreement about an item is but not seriously

Reasons for disagreement include use of an inappropriate ( not correct), disagreement with client as to or (i.e. ) & non-compliance with relevant or