COVID-19: The impact on Audits The Corona Virus (COVID-19) is already impacting South Africa in various ways and many businesses are faced with operational difficulties. However, entities must remember that the restrictions resulting from the virus, will also impact financial reporting requirements and increase the focus on certain areas during audits. Going concern Management of an entity are required to provide the auditor with their assessment of the entitys ability to continue as a going concern. The assessment should take into account all available information about the future and cover at least 12 months from the end of the reporting period. It may be difficult to make a meaningful Base Case economic forecast, let alone a plausible downside economic scenario. In this highly uncertain environment, going concern assessments will be more difficult for entities to make, and more companies will need to report a material uncertainty related to going concern. The objectives of the auditor are: to obtain sufficient appropriate audit evidence regarding, and conclude on, the appropriateness of managements use of the going concern basis of accounting in the presentation of financial statements; and to conclude on whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entitys ability to continue as a going concern. The conclusion reached by the auditor may have a significant impact on the audit opinion.

Required: Discuss the potential impact of Covid-19 on the possible audit opinions that can be issued by external auditors. [25 marks]