Guys, does going concern problem a material+pervasive issue or it can be only material ? I am having a problem with reporting whether can I give an "Except for" opinion.
Going concern issue will be a pervasive issue when the entity has a material going concern problem which ought to be disclosed or in the auditors judgement the financial statements should be prepared on breakup basis because the entity will not be a going concern in the foreseeable future based on the evidence obtained by the auditor and management has disagreed on disclosing or preparing the financial statements on breakup basis, then the issue is Pervasive for the auditor to give an adverse opinion and not qualified opinion.
So long as the statements are not produced on a break up bases, It could be either. It depends on the sufficiency of evidence or the materiality of risk detected. If material and backed by sufficient evidence then a pervasive opinion is warranted. Without sufficient evidence, and non disclosure of key issues, then a qualified opinion could be raised.