A going concern issue requires a modification of the wording to the three-paragraph standard unqualified audit report (public company).

Question

Quizplus · Accepted Answer

A going concern issue requires the addition of an emphasis of matter paragraph to the unqualified audit report. This paragraph explains that there is uncertainty about whether the company can continue as a going concern and refers readers to management's discussion and analysis section of the financial statements for further information. This modification is required for public companies in order to provide transparency to investors and other stakeholders about the health of the company.

A Going Concern Issue Requires a Modification of the Wording