Going Concern

Question 1

Steps

Answer 1

1. Risk Assesment
2. Procedures
3. Ethics & other non-audit services
4. Audit Opinion

Question 2

Risk Assesment

Answer 2

Bizz Risks = FS risks
1. Correct Basis used?
2. Correct disclosures made?(MURGC)
3. Inventory possible impaired? Has it been impaired
4. Recievables overstated possibly bad debt

Question 3

Procedures

Answer 3

1. Analyse & discuss if w. mgmt
2. Review loan agreement to see if breached
3. Reading minutes of board to spot discussion of financial difficulties.
4. Subsequent events reviewed to see if further indicators of GC.

Question 4

Audit Opinion

Answer 4

If MURGC adequately disclosed- *Unmodified Opinion,
* MUGC section to draw attention to disclosure. but state opinion not modified with respect to MUGC.

If MURGC NOT adequately disclosed
* Qualified/Adverse Opinion
* Basis of Qualified/Adverse Opinion - MUGC exists and not adequately disclosed.

Question 5

Ethics

Answer 5

• To save money may ask auditor to
• Review & advise on restructuring
• Review PFI for presentation to provider of finance
• Advising on corporate finance options

May produce:self review/advocacy/mgmt threats .

Safeguards:
- Review from partner not on audit team
- ECQR - Engagement quality control reveiw
- Confirmation from audit client they remain responsible for any decisions made.