The financial report of Fast Dollar Ltd indicates that there may be some going concern problems.However, the auditor concludes, based on mitigating factors, that the client will most likely continue as a going concern during the next year.The mitigating factors are adequately disclosed in the accounts.What type of audit opinion should the auditor express?
A)Disclaimer of opinion.
B)Unmodified opinion.
C)Qualified or adverse opinion.
D)Unmodified opinion with a Material Uncertainty Related to Going Concern paragraph.

Question

Quizplus · Accepted Answer

DAn unmodified opinion is appropriate when the financial statements present fairly the financial position of the company, which seems to be the case here as the auditor believes the company will continue as a going concern. However, given the initial concern about the company's ability to continue as a going concern, it is also appropriate to include a Material Uncertainty Related to Going Concern paragraph to draw attention to the note in the financial statements that discloses the mitigating factors. This does not modify the opinion but provides additional information to users of the financial statements.

The Financial Report of Fast Dollar Ltd Indicates That There