An auditor has serious doubts about a company’s ability to continue as a going concern because survival depends on a bank working capital loan that has been applied for but not yet granted. Management has fully disclosed these facts in the notes, and the auditor considers the disclosure adequate. What type of opinion should be issued?
Correct answer D. Unqualified opinion with reference to notes to the accounts
Explanation
When a material going concern uncertainty is adequately disclosed, the opinion remains unmodified, but the auditor draws readers' attention to the relevant note rather than qualifying or disclaiming.
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