Question Three (29 marks) Part A (23 marks) The outbreak of the Covid-19 pandemic in 2020 has different impacts on different companies. In performing the audit of the financial statements for most of the companies in the year of 2020, the auditor unavoidably has to consider the impacts of the Covid-19 pandemic on the going concern of the companies. Required: (a) Give an example to describe the impacts of the Covid-19 pandemic on a company and explain the specific circumstances under which an auditor should issue an unmodified audit report with an unmodified opinion. (Note: Only the first 100 words will be marked.) (3 marks) (b) Give an example each to describe the impacts of the Covid-19 pandemic on a company and explain the specific circumstances under which an auditor should issue an unmodified opinion with (1) an emphasis of matter, and (ii) material uncertainty related to going concern. (Note: Only the first 240 words will be marked.) (8 marks) (c) Give an example each to describe the impacts of the Covid-19 pandemic on a company and explain the specific circumstances under which an auditor should issue a modified audit report with (1) a qualified opinion: (ii) a disclaimer of opinion; and (iii) an adverse opinion. (Note: Only the first 360 words will be marked.) (12 marks) Part B (6 marks) At the stage of completing the audit, there are a number of things that the auditor need to do such as making a final assessment of the audit risk and obtaining a management representation letter from the client. (a) What actions may the auditor take when he concludes at the end of the audit that audit risk is not acceptable? (Note: Only the first 80 words will be marked.) (3 marks) (b) Under what circumstances are representations in a management representation letter considered acceptable audit evidence? (Note: Only the first 80 words will be marked.) (3 marks) Question Three (29 marks) Part A (23 marks) The outbreak of the Covid-19 pandemic in 2020 has different impacts on different companies. In performing the audit of the financial statements for most of the companies in the year of 2020, the auditor unavoidably has to consider the impacts of the Covid-19 pandemic on the going concern of the companies. Required: (a) Give an example to describe the impacts of the Covid-19 pandemic on a company and explain the specific circumstances under which an auditor should issue an unmodified audit report with an unmodified opinion. (Note: Only the first 100 words will be marked.) (3 marks) (b) Give an example each to describe the impacts of the Covid-19 pandemic on a company and explain the specific circumstances under which an auditor should issue an unmodified opinion with (1) an emphasis of matter, and (ii) material uncertainty related to going concern. (Note: Only the first 240 words will be marked.) (8 marks) (c) Give an example each to describe the impacts of the Covid-19 pandemic on a company and explain the specific circumstances under which an auditor should issue a modified audit report with (1) a qualified opinion: (ii) a disclaimer of opinion; and (iii) an adverse opinion. (Note: Only the first 360 words will be marked.) (12 marks) Part B (6 marks) At the stage of completing the audit, there are a number of things that the auditor need to do such as making a final assessment of the audit risk and obtaining a management representation letter from the client. (a) What actions may the auditor take when he concludes at the end of the audit that audit risk is not acceptable? (Note: Only the first 80 words will be marked.) (3 marks) (b) Under what circumstances are representations in a management representation letter considered acceptable audit evidence? (Note: Only the first 80 words will be marked.)