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    Question

    A statutory auditor of a listed company evaluates

    whether the going concern assumption holds. He observes continuous losses, negative net worth, and pending litigation. However, the company has committed funding from a strategic investor. What should the auditor conclude?
    A Modify opinion with EOM Correct Answer Incorrect Answer
    B Issue disclaimer of opinion Correct Answer Incorrect Answer
    C Treat company as non-going concern Correct Answer Incorrect Answer
    D No action needed if investor is credible Correct Answer Incorrect Answer

    Solution

    Auditor must include an Emphasis of Matter (EOM) to highlight going concern uncertainty as per SA 570, even if mitigating factors exist.

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