Question 5c
Marking Guide
a) up to 1 mark per well explained point – if the procedure does not clearly explain how this will help the auditor to consider going concern then a 1/2 mark only should be awarded: | |
| – review cash flow forecasts | |
| – sensitivity analysis | |
| – review bank agreements, breach of key ratios | |
| – review bank correspondence | |
| – discuss if alternative finance obtained | |
| – review post year end sales and order book | |
| – review suppliers correspondence | |
| – inquire lawyers any litigation | |
| – subsequent events | |
| – board minutes | |
| – management accounts | |
| – consider additional disclosures under ias 1 | |
| – written representation | |
| maximum marks | 6 |
b) up to 1 mark per point | |
| – depends on adequacy of disclosures | |
| – adequately disclosed – unmodified | |
| – emphasis of matter para – after opinion | |
| – not adequately disclosed – modified | |
| – material misstatement | |
| – add paragraph before opinion and impact on opinion paragraph | |
| maximum marks | 4 |