The company has been expanding in the past few years and has incurred a huge amount of
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Question:
The company has been expanding in the past few years and has incurred a huge amount of debt with a net current liability of $2.8 million in current year. Its banker was considering to cut the facilities provided as the company failed to pay interest on a number of occasions. The company sold its major product line in order to generate extra cash flows.
Despite of the above, you concluded that the company’s use of going concern assumption is appropriate.
Required:
Suggest an appropriate auditors’ report to be prepared. Explain your reasons.
Expert Answer:
Whenever the year end financial statements are compiled it is assumed that the company will continue ... View the full answer
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