Page 172 - Internal Auditing Standards

Guide to Using International Standards on Auditing in the Audits of Small- and Medium-Sized Entities Volume 1—Core Concepts

Paragraph # Relevant Extracts from ISAs

570.24 If there is significant delay in the approval of the financial statements by management or

those charged with governance after the date of the financial statements, the auditor shall
inquire as to the reasons for the delay. If the auditor believes that the delay could be related
to events or conditions relating to the going concern assessment, the auditor shall perform
those additional audit procedures necessary, as described in paragraph 16, as well as consider
the effect on the auditor’s conclusion regarding the existence of a material uncertainty, as

described in paragraph 17.

The final step is to determine the impact of identified events/conditions on the audit report and communicate
the decision to management and those charged with governance, where applicable. The following exhibit
summarizes the requirements.

Exhibit 14.5-1

Do financial statements
Use of Going-Concern fully describe events/ Unmodified opinion plus
Assumption Appropriate Yes
conditions and disclose “Emphasis of Matter”
but a Material
existence of material paragraph
Uncertainty Exists
uncertainty?
No
Express a qualified
or adverse opinion,
and state material
uncertainty exists

Use of Going-Concern Express an
Assumption Inappropriate adverse opinion

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