John Selwood’s Question Corner
John Selwood answers questions from auditors on going concern (including when auditing charities) and COVID-19 support packages in relation to UK GAAP.
In one of your previous Q&As, you wrote about material uncertainty paragraphs, going concern and positive reporting, but you didn’t mention what you might report if the going concern basis was not appropriate. What impact would this have on the audit report?
I am assuming that this question relates to financial statements that are not prepared on a going concern basis. If they were prepared on a going concern basis, but the auditor judged that the basis was not appropriate, then the auditor would have to express an adverse opinion in the audit report, saying that the wrong basis was used and that the financial statements do not show a true and fair view.