Mudit & Associates is appointed as Statutory Auditors of GRF Private Limited for the financial year 2023-24. The company is into the business of…

(a) As per SA 570, “Going Concern" if events or conditions have been identified that may cast significant doubt on the entity's ability to continue as a going concern, the auditor shall obtain sufficient appropriate audit evidence to determine whether or not a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern through performing additional audit procedures, including consideration of mitigating factors. These procedures shall include: (a) Where management has not yet performed an assessment of the entity's ability to continue as a going concern, requesting management to make its assessment. (b) Evaluating management's plans for future actions in relation to its going concern assessment, whether the outcome of these plans is likely to improve the situation and whether management's plans are feasible in the circumstances. (c) Where the entity has prepared a cash flow forecast, and analysis of the forecast is a significant factor in considering the future outcome of events or conditions in the evaluation of management's plans for future actions: (i) Evaluating the reliability of the underlying data generated to prepare the forecast; and (ii) Determining whether there is adequate support for the assumptions underlying the forecast. (d) Considering whether any additional facts or information have become available since the date on which management made its assessment. (e) Requesting written representations from management and, where appropriate, those charged with governance, regarding their plans for future actions and the feasibility of these plans. In the given case, CA M has observed such points that may cast significant doubt on the entity's ability to continue as a going concern. Therefore, CA M should follow audit procedures such as: Review of management's assessment of the company's ability to continue as a going concern.Examine and challenge the reasonableness of the company's cash flow forecasts and key assumptions.Review events after the reporting period that might affect the going concern assumption, such as further financial deterioration or inability to secure financing.Analysis of the company's key financial ratios and compliance with loan agreements to assess liquidity and solvency.Review of the company's challenges and efforts to secure additional financing and the reasons for the bank's reluctance to provide further credit.Assess the impact of declining customer base, delayed payments, and other operational challenges on the company's ability to continue as a going concern. Further, as per SA 570 if adequate disclosure about the material uncertainty is made in the financial statements, the auditor shall express an unmodified opinion and the auditor's report shall include a separate section under the heading “Material Uncertainty Related to Going Concern" to: (a) Draw attention to the note in the financial statements that discloses the matters set out in paragraph 19; and (b) State that these events or conditions indicate a material uncertainty exists that may cast significant doubt on the entity's ability to continue as a going concern and that the auditor's opinion is not modified in respect of the matter.