During the final audit, the finance director has informed the audit team that Winchester’s bankers will not make a decision on the renewal of the overdraft facility until after the auditor’s report is signed. The audit engagement partner is satisfied that the use of the going concern basis is appropriate. The directors have agreed to include some brief going concern disclosures in the draft financial statements and the audit team still have to assess the adequacy of these disclosures.

 Discuss the issue and describe the impact on the auditor’s report of Winchester of adequate AND inadequate going concern disclosure.

Answer rating: 100% (QA)

The issue of Winchesters bankers not making a decision about the renewal of the overdraft facility u... View the full answer