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Sonali NandaSonali Nanda asked 1 year ago

In this qs, when the business is going to cease, then  going concern basis of accounting is inappropriate, shouldn’t the auditor give adverse remarks for this?
Rathi Limited had definite plan of its business being closed within a short period from the close of the accounting year ended on 31st March, 2018. The Financial Statements for the year ended 31/03/2018 had been prepared on the same basis as it had been in earlier periods with an additional note that the business of the Company shall cease in near future and the assets shall be disposed off in accordance with a plan of disposal as decided by the Management. The Statutory Auditors of the Company indicated this aspect in Key Audit Matters only by a reference as to a possible cessation of business and making of adjustments, if any, thereto to be made at the time of cessation only. Comment on the reporting by the Statutory Auditor as above.
 
 

2 Answers
Best Answer
RaviRavi Staff answered 1 year ago

yes answer is not appropriate
auditor should give adverse opinion, and whole matter should be explained in detail in basis of adverse opinion
in KAM they should explain it was a key audit matter and for further detail refer basis of adverse opinion

Sonali NandaSonali Nanda replied 1 year ago

Thank you. In the MTP answer only reference to KAM was given. There was nothing in regard to adverse opinion. just wanted to know whether adverse opinion can be given or not.

RaviRavi Staff answered 1 year ago

but if same question comes try to stick to answer given by icai

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