You are a senior auditor at Smith & Co who is the external auditor of Quasar Co (Quasar). Quasar is a pharmaceutical company and has the accounting year end at 30 June 2020. Quasar is producing cancer treatment medicines and 50% of its revenue comes from Australia where the government requires Quasar to have a licence to operate. Due to a change in Australias health regulation, Quasar expects its licence to operate in Australia to be withdrawn. However, after carrying out an assessment of the entity's ability to continue as a going concern, the directors have decided that Quasar has sufficient resources to continue operating for the 18 months ending 30 December 2021. Additional funding may be required from that date but Quasar does not currently have this in place.

Required

a) Describe the work you will carry out to ascertain whether the directors going concern assessment of Quasar is appropriate. (8 marks) b) Discuss the implications for the auditors report on Quasars financial statements for the year ended 30 June 2020 if the directors of Quasar adequately disclose the information in respect of the licence to operate in Australia in the notes to the financial statements. (6 marks)

c) Discuss the implications for the auditors report on Quasars financial statements for the year ended 30 June 2020 if the directors of Quasar do not adequately disclose the information in respect of the licence to operate in Australia in the notes to the financial statements. (6 marks)