Document ID: chunk:federal_register_of_legislation:F2022C01208:reg:14:p14
Version: federal_register_of_legislation:F2022C01208
Segment Type: reg
Provision Reference: reg 14 (pt 14/57)
Character Range: 47441–50485

(Ref: Para. A51‑A52)

    48.               The auditor shall express a qualified conclusion when, in rare circumstances, there is a limitation on the scope of the auditor's work that is confined to one or more specific matters, which while material, is not in the auditor's judgement pervasive to the financial report, and when the auditor concludes that an unqualified conclusion cannot be expressed.  A qualified conclusion shall be expressed as being "except for" the effects of the matter to which the qualification relates.  The conclusion paragraph shall be headed "Qualified Conclusion".

Going Concern and Material Uncertainties (Ref: Para. A53‑A54)

Use of going concern basis of accounting is appropriate

49.               If adequate disclosure about the material uncertainty is made in the financial report, the auditor shall express an unmodified review conclusion and the auditor's review report shall include a separate section under the heading "Material Uncertainty Related to Going Concern" to highlight a material uncertainty relating to an event or condition that casts significant doubt on the entity's ability to continue as a going concern.  This section shall:

(a)                Draw attention to the note in the financial report that discloses the matter;

(b)                State that the events or conditions indicate that 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 conclusion is not modified in respect of the matter.

50.               If a material uncertainty that casts significant doubt on the entity's ability to continue as a going concern is not adequately disclosed in the financial report, the auditor shall:

(a)                Express a qualified or adverse conclusion, as appropriate; and

(b)                In the Basis for Qualified or Adverse Conclusion section of the auditor's review report, state that a material uncertainty exists that may cast significant doubt on the entity's ability to continue as a going concern and that the financial report does not adequately disclose this matter.

Use of going concern basis of accounting is inappropriate

51.               If the financial report has been prepared using the going concern basis of accounting but, in the auditor's judgement, management's use of the going concern basis of accounting in the preparation of the financial report is inappropriate, the auditor shall express an adverse conclusion.

Emphasis of Matter Paragraph (Ref: A56 and A57)

52.               The auditor shall consider including an Emphasis of Matter paragraph in the auditor's review report to draw users' attention to a matter presented or disclosed in the financial report that, in the auditor's judgement, is of such importance that it is fundamental to users' understanding of the financial report.

53.               When the auditor includes an Emphasis of Matter paragraph in the auditor's review report the auditor shall:

(a)                Include the