Management of ECX Systems Limited acknowledged that going concern assumption will not be suitable while preparing financial statements and informs…

CA Intermediate · Auditing and Ethics · PYQS · January 2025
Management of ECX Systems Limited acknowledged that going concern assumption will not be suitable while preparing financial statements and informs the auditor that the fact of uncertainty related to going concern would suitably be disclosed in the notes of accounts. How should the auditor address this while preparing Independent Auditor's Report?
(A) (A) To include a separate section under the heading "Material uncertainty related to Going Concern" in the auditor's report as per the requirement of SA 570.
(B) (B) To include a separate section under the heading "Key Audit Matters" in the auditor's report as per the requirement of SA 701.
(C) (C) To include a sub section under the heading "Material uncertainty related to Going Concern" under separate section of "Key Audit Matters" in the auditor's report as per the requirement of SA 705.
(D) (D) To include a separate section under the heading "Key Audit Matters" in the auditor's report as per the requirement of SA 570.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

(A) To include a separate section under the heading "Material uncertainty related to Going Concern" in the auditor's report as per the requirement of SA 570.

Topics: Audit Evidence, Audit Report

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