Corsco is a large telecommunications company that is listed on astock exchange.It is highly geared because,like many suchcompanies,it borrowed a large sum to pay for a licence to operate amobile phone network with technology that has not provedpopular.The companiy's share price has dropped by 50% during thelast three years and there has been several changes of seniormanagement during that period.There's been considerable speculationin the press over the last six month about whether the company cansurvive without being taken over by a rival:
(a) Describe the external auditors responsibilities and the workthat the auditor should perform in relation to the going concernstatus of companies
(b) Descrbe the possible audit reports that can be issued wherethe going concern status of a company is called into question;youranswer should describe the circumstances in which they can beissued.
(c) On the basis of the information provided above desribe theaudit report that you consider is likely to be issued in the caseof Corsco,giving reasons
(d) Explain the difficulties that would be faced by Corsco andits auditors if Corsco's audit report made references to goingconcern,giving reasons
