CA Inter P5 · Chapter 7 · Question 5 of 12
The auditor of Ruhan Airlines Ltd. concludes that the use of the going concern basis is appropriate but a material uncertainty exists, and management has made adequate disclosure. Under SA 570, the auditor shall:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Express an unmodified opinion and include a separate section headed 'Material Uncertainty Related to Going Concern'
Explanation
Under the revised SA 570, where the going concern basis is appropriate, a material uncertainty exists and disclosure is adequate, the auditor expresses an unmodified opinion and includes a separate section with the heading 'Material Uncertainty Related to Going Concern'. An Emphasis of Matter paragraph is not used for this purpose.
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