The following extract was reported by The Sun on October 23, 2019:

G Neptune Bhds external auditors Messrs Moore Stephens Associates PLT has issued a statement of material uncertainty related to going concern in respect of its financial statements ended June 30, 2019. G Neptunes outstanding loan payables and accrued interest amounted to RM1.09 million and RM743,710 respectively. It also provided RM385,912 for crystallization of corporate guarantee granted to its subsidiary.

We were unable to obtain sufficient appropriate audit evidence to confirm the accuracy of the carrying amount stated or whether any further liabilities are required to be provided in the financial statements in relation to these loan payables as we were unable to obtain external confirmations from the lenders, said the auditor. Furthermore, it was unable to obtain sufficient appropriate audit evidence to confirm the accuracy of the remaining payable balances of the groups subsidiary amounting to RM238,983. For the financial year ended June 30, 2019, the group reported a net loss of RM1.02 million with a deficit in shareholders equity of RM4.13 million. The groups current liabilities also exceeded current assets by $4.13 million.

G Neptune has been a Guidance Note 3 (GN3) company since Nov 30, 2017. It is still evaluating its options to formulate a regularization plan to address the GN3 status. It had made two applications to Bursa Securities for extension of time until November 30, 2019 for it to submit the proposed regularization plan. As the group has ceased all business operations, the auditor said its outlook is dependent on the outcome of its rationalization exercise. The board is committed to structuring a strong rationalization plan that will bring the group back to a stronger foundation in order to exit its GN3 status. REQUIRED: (a) Describe the main causes for the auditor to cast doubt on G Neptune Bhds ability to continue as a going concern. (25 marks) (b) Explain the rationale for G Neptunes management to form a plan to regularize the groups financial condition and the outcome of the plan on the going concern and GN3 status of the group, and explain the most probable type of the auditors opinion issued on the auditors report of G Neptune Bhd. (25 marks) (Total: 50 marks) QUESTION 2 The following extract was reported by The Sun on May 9, 2013:

On May7, 2013, HB Globals external auditors had said in the course of its audit it was unable to satisfactorily and independently substantiate the bank balance of a subsidiary amounting to RMB249.63 million as at Dec 31, 2012.

In addition, we were not able to receive independent confirmations on majority of the trade receivables and trade payables that were circularized; these balances represented 56% of trade receivables and 48% of trade payables as at Dec 31 2012, said Paul Wan & Co. REQUIRED: a) Explain to the management the four (4) types of audit opinion, and Present to the management the type of audit opinion will be issued in light of the circumstances reported in the above case. QUALIFIED (25 marks) b) Discuss with an illustration each the following three circumstances that result in departure from an unqualified opinion: Scope limitation; GAAP departure; and Auditor not independent (25 marks) (Total: 50 marks) (GRAND TOTAL: 100 marks)