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Answer AT LEAST TWO but NO MORE THAN THREE questions from this section. 1. Infra Management plc (Infra) specialises in the building and facilities management

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Answer AT LEAST TWO but NO MORE THAN THREE questions from this section. 1. Infra Management plc (Infra) specialises in the building and facilities management of hospitals, partnering with govemments who outsource large infra structure projects. Infra is currently constructing a hospital for Afco, a consortium that manages hospital buiding contracts for a number of African countries. Construction is running behind schedule because of design faults and disputes with suppliers regarding the quality of materials. As a result Afoo are withholding a payment of E150 million to Infra. Afco will not award Infra any further contracts until the issues have been resolved. Afco are disputing the value of costs incurred to date. The construction is significantly over budget, despite a management culture within Infra of "hitting budget at all costs" which has on occasion led to reductions in quality. Recently, some of the national newspapers have been running stories regarding the treatment of workers on Infra's construction sites and whether the government is recoiving good value for money. There is currently much political unrest in some of the African countries where Afco manages hospital construction projects and there is political pressure on Afco to use local companies in preference to foreign contractors. As at 31 December 2022 Infra had total bank debt of 450 million, of which 250 million is maturing in the next year and will require refinancing. The directors' going concem statement in the financial statements reads 'In assessing the Company's ability to continue as a going concern, the board reviews three year forecasts of the company's borrowing requirements compared to available bank facilities. The board applies sensitivity analysis to these forecasts and the directors are of the opinion that the company has adequate resources to continue in operational existence for the foreseeable future. The directors are of the opinion that it is appropriate to prepare the financial statements on a going concern basis." As the audit engagement partner for Infra, you are reviewing the audit file with a view to formulating your audit opinion on the financial statements for the year to 31 December 2022. uired Explain what sorts of audit evidence should have been collected by the audit team regarding the going concern issue. (15 marks) Evaluate the types of audit opinion which may be relevant when there is doubt about the ability of the client to continue as a going concern and, in the light of the directors' going concern statement, decide which is the most appropriate audit opinion. (10 marks)

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