Part C
Please refer to the Auditing Standard ASA 570 Going Concern, identify factors (financial and non-financial) that you would consider when assessing whether the CIO will continue its operation as a going concern.
Please note that you cannot adapt any factors that has been described in the auditor’s report. For example, the auditor has indicated that in the notes to financial statements, note 1(d) states that the Company has continuously making loss and negative cash flow, although they are able to extend their loan facility repayment until 2019. Therefore, when you are assessing whether going concern is appropriate or otherwise, you will have to think other factors than the net loss incurred, net cash outflows, as well as the loan facility of $1,500,000 with extended repayment.
[20 marks]
3. You need to provide a detailed background description about CIO. This must include the information below. You must answer the questions in the following format.
Information required Answer
ASX code (0.5 Mark)
Listing date (1Mark)
Industry (1 Mark)
Number of subsidiaries (1Mark)
Financial year end date (1 mark)
Audit firm’s name (0.5 Mark)
Audit partner’s name (1 mark)
Type of audit opinion (1 Mark)
Audit report date (1 Mark)
Total annual audit fees (1 Mark)
Total- non-audit fees (1 Mark)
Table 2. Audit Report Information
[10 marks]
4. You are required to:
• Read the audit report of CIO and its controlled entities for 2018.
• Comment on the type of audit opinion with reference to the Australian Accounting Standards and Australian Assurance and Auditing Standards.
Whenever applicable, your comments should include:
• Detailed explanation of the audit opinion (e.g., circumstances giving rise to the audit opinion).
• Detailed explanation of the emphasis of matter (e.g., circumstances giving rise to the emphasis of matter).
• Factors considered to come to the audit opinion.
• Material misstatement
[10 marks]
5. Apart from the general formatting requirement described below, your report should be presented professionally in a format as if it were to be presented to an audit committee meeting. When appropriate, the use of tables, graphs and charts is highly encouraged. However, the assignment must be largely based on the text in paragraphs. Students need to demonstrate appropriate and accurate use of the Harvard style for references and citations.
For more information regarding Harvard referencing style, please visit: https://utas.libguides.com/referencing/Harvard
[10 marks]