Part (d) for 4 marks required a description of the impact on the audit report if the auditor believes the company is a going concern but is subject to a material uncertainty. Candidates performed disappointingly on this question.

Unfortunately many candidates approached this requirement by suggesting every possible impact on the audit report. Very few candidates seemed to realise that the key issue was whether the disclosures given by the directors were adequate or not and so did not approach the answer in a methodical way.

It appears that there is a lack of knowledge in relation to the differences between a modified report and a modified opinion and that if the inclusion of an emphasis of matter paragraph is considered appropriate the report but not the opinion is modified.

Once again future candidates are reminded that audit reports is a key element of the syllabus and hence an understanding of how an audit report can be modified and in which circumstances, is considered very important for this exam.