What does an audit report?
Most of the audit on the financial statements reports gives the company a health passport without spot or an own opinion. At the other end of the spectrum, the auditor States that financial statements are misleading and should not be relied upon. These negative audit report is called a negative opinion. Which is the only accounting stick. They have the power to speak of a separate financial statements a negative and no company wants to die. The threat of an unfavourable opinion almost always motivates a company to give way to the accountant and accounting or disclosure will be modified to avoid the kiss of death to a negative opinion. A negative opinion of audit says that the financial statements of the company are misleading. The SEC does not tolerate the negative views of Auditors of public companies; It would suspend trade a stock company shares if the company received by an unfavourable opinion of his CPA Accountant.
A modification of an audit statement is very serious when the company CPA said they have substantial doubts about the ability of the company to continue as a permanent concern. Continuity is a company that has sufficient financial resources and the momentum to continue normal operations in the near future and could absorb a bad turn of events without the default on its obligations. A permanent concern does not before an impending financial crisis or an urgent financial need. A company under some financial distress could be, but always a permanent concern are assessed in total. The CPA accountant unless evidence to the contrary, it is assumed that the company is a permanent concern. If an auditor has serious concerns as to whether the company is a permanent concern, these doubts expressed in the report of the auditor.
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