ACCA AA · Chapter 13 · Question 10 of 12
The auditor of Hasp Co concludes that the going concern basis is appropriate, but that a material uncertainty exists which is adequately disclosed in the financial statements. How should this be reported under ISA 570?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Unmodified opinion with a separate section headed 'Material Uncertainty Related to Going Concern'
Explanation
When the going concern basis is appropriate and a material uncertainty is adequately disclosed, ISA 570 requires an unmodified opinion and a separate section headed 'Material Uncertainty Related to Going Concern', drawing attention to the disclosure. If disclosure were inadequate, a qualified or adverse opinion would be needed; an adverse opinion is required if the going concern basis is inappropriate.
More Misstatements and the auditor's report MCQs
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