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Flashcards in Reporting Deck (2)
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Company is not a going concern, accounts have/haven't been prepared in a breakup basis...

Have (correctly prepared):
Unmodified opinion, but report with an 'emphasis of matter paragraph'

Haven't (disagree with preparation)
- Modified report with an adverse opinion.


Impacts of issues on financial statements

1) Assess materiality:
P 5%
A 2%
R 1%

If material:
- Items may be impaired / need writing down
- Required to amend values as material adjusting events after the reporting period.

If not material
- Represents an adjusting event after the reporting period - as it provides evidence if conditions at the reporting date.
- As not material, no further work required.

2) Assess going concern implications
If clear not going concern - use break up basis & disclose in notes

If uncertain - use going concern basis & include note in FS