5) For each of the material audit completion issues you are required to indicate the type of audit opinion you would be required to issue, as well as the reasons for issuing the particular audit opinion.

GAMMA Limited - Information obtained (for Question 5) Year ended 30 June 2020

E. Audit Completion issues - the following are material issues identified

1 On 5 July, Alfa Ltd, a major customer of Gamma Ltd, was placed into liquidation. As Alfa Ltd had confirmed the balance due to Gamma Ltd as at balance date, management of Gamma Ltd has refused to write off or provide for the Alfa Ltd account in the 30 June 2020 financial report. However, they are prepared to disclose this information as a note to the financial report

2 Stock valuation?the audit of stock valuation indicated that the Company has failed to make any provision in respect of stock obsolescence. The audit work raised serious questions about the valuation of inventory.

3 Going concern?the company has incurred substantial trading losses for the current year. While the company still has a positive net asset position, further losses in future years may result in the deterioration of the capital base. The continuation of the company as a going concern is dependent on the continued financial support of the company's bankers and the ability of the trading businesses within the economic entity to generate a positive cash flow.

Discussions with the bankers indicate that it is their present intention to continue to support the group in the hope that the group can reverse its current trading position.

A review of the company's budget in respect of future trading periods indicate that the reversal in trading performance will be gradual and is expected to take at least five years.

2019 2018 2017 2016 20x3 The following historical information is relevant. Turnover 5'000 20,000 25,000 26,000 24,000 22,000 Profit/(loss) after tax S'ooo (4,000) (1,000) 1,000 2,000 5,000 Net current Assets/(ab) 5'000 (500) (200) 400 600 800 Net Assets 5'000 3,200 7,200 8,200 7,200 5,200