Audit Opinions

Question 1

Opinion if management refuses to raise a provision

Refuse to give auditors access to information

Answer 1

• This would constitute a factual uncorrected misstatement IAS 37
• Probability exists
• Whether audit opinion needs to be modified must be determined whether misstatement is material qualitatively or quantitatively
• Final materiality set at lower end
• From a qualitative perspective the matter is not material as it is unlikely to influence economic decisions
• It is unlikely that failure to record the provision will result in misstatement which is pervasive to FS
• Appropriate to express a qualified audit opinion

2. • Request mngt to extend period of assessment to at least 12 months
     - Consider implications on audit report
     - Qualified or disclaimer opinion ISA570 par 23
     - It may not be possible for auditor to obtain sufficient appropriate audit evidence regarding existence of plans mngt put in place
     - Material uncertainty exists due to:
3. Use of GC assumptions is considered appropriate by….
4. Inadequate disclosures as mngt refusing to…
5. Limitation of scope
6. Express qualified opinion
7. Disclose in “basis for opinion” paragraph that material uncertainty exists
8. Consider RI and s45 APA

Question 2

No uncorrected misstatements discuss effect on qualified auditors report on audit opinion

Answer 2

• Consideration of impairment loss on net investment of associates
• Considered going concern
• Materiality evaluated if impairment not made
• Consider scope limitation

Question 3

Conclusion on going concern

Answer 3

• Does material uncertainty exist?
• Is mngt use of GC appropriate (No: Adverse opinion, YES: Is it disclosed properly? No: quality or adverse, YES: unmodified and section “material uncertainty related to GC”)