Upon completing the audit of ABC Company Ltd. ,the auditor has concluded that the financial statements are fairly presented and there is material uncertainty as to the ability of the company to continue as a going concern.Consequently,what type of audit opinion should be issued?
A)An adverse audit opinion.
B)An unqualified opinion report with an emphasis of matter paragraph added.
C)A qualified opinion due to GAAP departure.
D)A standard unmodified audit report with the inclusion of the going concern issue as a key audit matter.

Question

Quizplus · Accepted Answer

An unqualified opinion report with an emphasis of matter paragraph added is the best choice in this scenario. This is because the financial statements are fairly presented, and there is only the material uncertainty regarding the company's ability to continue as a going concern, which should be disclosed in the report as an emphasis of matter. An adverse audit opinion is only issued if the financial statements are materially misstated, which is not the case. A qualified opinion is used when there is a departure from Generally Accepted Accounting Principles (GAAP), which is not the issue here. A standard unmodified audit report with the inclusion of the going concern issue as a key audit matter would not provide enough emphasis on the issue, which is a significant concern that users of the financial statements need to be made aware of.

Upon Completing the Audit of ABC Company Ltd