Your audit client, Roe Limited (RL), has found operations more challenging this financial year due to impacts
Question:
Your audit client, Roe Limited (RL), has found operations more challenging this financial year due to impacts resulting from Covid-19. RL is struggling to meet the cash flow and profitability projections required by the bank as part of its debt covenant. You are aware that the bank has indicated this situation may affect the financing arrangements currently in place which are critical to the success of RL’s business. As the auditor, you are concerned about this issue, although it has been appropriately disclosed in the financial statements, which you believe are fairly stated. What is the most appropriate audit opinion?
a. Unmodified
b. Qualified
c. Adverse
d. Disclaimer of opinion
In relation to the audit report for Roe Limited example above, what is the most appropriate additional paragraph/section, if any?
a. None
b. The emphasis of Matter
c. Other Information
d. Material Uncertainty related to Going Concern
Expert Answer:
