Question
You are a partner in Collins LLP (Collins), a large, international firm of accountants and auditors. One of your audit clients is Rex plc Group
You are a partner in Collins LLP (Collins), a large, international firm of accountants and auditors. One of your audit clients is Rex plc Group (the Group), a UK-based, international group of automotive manufacturing companies, and a member of the UKs FTSE-250 list of companies.
The audit team that you lead has completed the final audit of the Group for the year ended 31 December 2021. The team has completed the interim audit with no outstanding issues. The final audit is complete with one outstanding issue.
You are finalising the audit and currently deciding on the contents of the audit report. Extracts of four paragraphs from the draft audit report are set out in boxes A to D below.
D | In auditing the financial statements, we have concluded that the directors use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Groups ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. |
Required
(d) Identify and briefly explain the purpose of the paragraph in box D.
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