Going Concern

Question 1

• company is a going concern and there’s
• no uncertainty relating to going concern…

Answer 1

• unmodified opinion
• include ‘conclusions in relation to going concern’ section

Question 2

• company isn’t a going concern
• FS prepared on going concern basis

Answer 2

• material and pervasive misstatement
• adverse opinion
• don’t include ‘conclusions in relation to going concern’ paragraph

Question 3

• company isn’t a going concern
• directors have prepared FS on break-up basis & disclosed

Answer 3

• FS are presented fairly
• unmodified opinion
• emphasis of matter paragraph is used to highlight break-up basis
• don’t include ‘conclusions in relation to going concern’ section

Question 4

when is a ‘conclusions relating to going concern’ section used?

Answer 4

when the entity is a going concern

Question 5

• going concern status is uncertain
• director’s have adequately disclosed uncertainty

Answer 5

• unmodified opinion
• ‘material uncertainty in relation to going concern’ paragraph is used
• don’t include ‘conclusions in relation to going concern’ paragraph

Question 6

• going concern status is uncertain
• adequate disclosure of uncertainty hasn’t been made

Answer 6

• FS are misstated
• don’t include ‘conclusions in relation to going concern’ section
• could be considered material or material & pervasive
• qualified or adverse opinion is issued
• explain in ‘basis for qualified/adverse opinion’ paragraph