During the audit of the financial statements of KIN Ltd. for the year ended 31st March 2025, the auditor observed that the company has suffered…

(a) As per SA 570 “Going Concern", if the auditor concludes that the management's use of going concern basis of accounting is appropriate in the circumstances but a material uncertainty exists, the auditors shall determine whether the financial statements: (A) Adequately disclose the principal events or conditions that make a significant doubt on the entity's ability to continue as a going concern and management's plan to deal with these events or conditions, and (B) Disclose clearly that there is a material uncertainty related to events or conditions that may cast significant doubt on entity's ability to continue as a going concern and therefore, that it may be unable to realize its assets, and discharge its liabilities in the normal course of business. (C) The disclosures may include: i. Management's evaluation of the significance of the events or conditions relating to the entity's ability to meet its obligations; or ii. Significant judgements made by management as a part of its assessment of the entity's ability to continue as a going concern iii. Disclosures about the magnitude of the potential impact of the principal events or conditions, and the likelihood and timing of the occurrence. iv. The auditor shall express and unmodified opinion and the auditor's reports shall include a separate section under the heading "Material Uncertainty Related to Going Concern" to: Draw attention to the note in the financial statement that discloses the events or conditions andState that these events are conditions indicate that a material uncertainty exists that may cast significant doubt on the entity's ability to continue as a going concern and the auditor's opinion is not modified in respect of the matter and how the matter was addressed in the audit. In the given case, it was observed that KIN Ltd. has incurred recurring losses and is facing negative operating cash flows, indicating financial difficulty. However, the management has prepared the financial statements on a going concern basis and has adequately disclosed the relevant events and conditions, along with its plans to improve liquidity, clearly stating regarding material uncertainty which may cast significant doubt on the company's ability to continue as a going concern. Further, the auditor is also satisfied that the use of the going concern assumption is appropriate and the disclosures are adequate based on the audit evidence. Accordingly, the auditor shall express an unmodified opinion and include a separate paragraph under the heading "Material Uncertainty Related to Going Concern" in the auditor's report, drawing attention to the relevant disclosures without modifying the opinion in line with SA 570 (Revised) “Going Concern".