I 8 (4,689 6s 45() 8 )8(65 s46+658
(<<9<96(8 (4,68 @6,5+ +5+9565 9(8,
<(986s (5, 89(5s(+865s 68 s4+ <(986s 9 +5+4,s 8(8 869 ,6s+s49 65 8 65(5+6(
s8(8:58s 6s 58 (,4(8> 8 (4,689 s4, :,6= 8 (4,68 9<98 (<<9<96(8=.
COMPLETING THE AUDIT AND POST-AUDIT RESPONSIBILITIES
PSA $%
SUBSE0UENT EVENTS
T (4,689 s4, +5s6,9 8 +8
s4)s458 @58s 5 8 65(5+6( s8(8:58s (5,
5 8 (4,689 s 9<98.
The procedures to identify e+ents that $ay reuire
ad*ust$ent of) or disclosure in) the financial state$ents would be perfor$ed as near as practicable to the date of the auditors report and ordinarily include the
following%
•Re+iewing procedures $anage$ent has established to ensure that subseuent e+ents are identified
•Reading $inutes of the $eetings of shareholders) the board of directors and audit and e'ecuti+e co$$ittees held after period end and inuiring about $atters discussed at $eetings for which
$inutes are not yet a+ailable
•Reading the entitys latest a+ailable interi$ financial state$ents and) as considered necessary and
appropriate) budgets) cash flow forecasts and other related $anage$ent reports
•&nuiring) or e'tending pre+ious oral or written inuiries) of the entitys lawyers concerning litigation and clai$s
•&nuiring of $anage$ent as to whether any
subseuent e+ents ha+e occurred which $ight
affect the financial state$ents .'a$ples of
inuiries of $anage$ent on specific $atters are%
B The current status of ite$s that were accounted for on the basis of preli$inary or inconclusi+e data
B /hether new co$$it$ents) borrowings or guarantees ha+e been entered into
B /h
ether sales of assets ha+e occurred or are planned
B /hether the issue of new shares or debentures or an agree$ent to $erge or liuidate has been $ade or is planned
B /hether any assets ha+e been appropriated by go+ern$ent or destroyed) for e'a$ple) by fire or flood
B /hether there ha+e been any de+elop$ents regarding ris: areas and contingencies
B /hether any unusual accounting ad*ust$ents ha+e been $ade or are conte$plated
B /hether any e+ents ha+e occurred or are li:ely to occur which will bring into uestion the
appropriateness of accounting policies used in the financial state$ents as would be the case) for
e'a$ple) if such e+ents call into uestion the +alidity of the going concern assu$ption
PSA $7%
GOING CONCERN
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:(5(:58s 4s 8 65 +5+95
(ss4:<865 65 8 <9<(9(865 8 65(5+6(
s8(8:58s.
.'a$ples of e+ents or conditions) which indi+idually or collecti+ely) $ay cast significant doubt about the going concern assu$ption are set out below This listing is not all@inclusi+e nor does the e'istence of one or $ore of the ite$s always signify that a $aterial uncertainty e'ists
Financial
F 4et liability or net current liability position
F ,i'ed@ter$ borrowings approaching $aturity without realistic prospects of renewal or
repay$ent or e'cessi+e reliance on short@ter$
borrowings to finance long@ter$ assets
F &ndications of withdrawal of financial support by debtors and other creditors
F 4egati+e operating cash flows indicated by historical or prospecti+e financial state$ents
F Ad+erse :ey financial ratios
F Substantial operating losses or significant deterioration in the +alue of assets used to generate cash flows
F Arrears or discontinuance of di+idends
F &nability to pay creditors on due dates
F &nability to co$ply with the ter$s of loan agree$ents
F Change fro$ credit to cash@on@deli+ery transactions with suppliers
F &nability to obtain financing for essential new product de+elop$ent or other essential
in+est$ents
Operating
F oss of :ey $anage$ent without replace$ent
F oss of a $a*or $ar:et) franchise) license) or principal supplier
F abor difficulties or shortages of i$portant supplies
Other
F 4on@co$pliance with capital or other statutory reuire$ents
F Pending legal or regulatory proceedings against the entity that $ay) if successful) result in clai$s that are unli:ely to be satisfied
F Changes in legislation or go+ern$ent policy e'pected to ad+ersely affect the entity
A,,6865( A4,68 P9+,49s W5 E@58s 9 C5,6865s (9 I,5866,
W5 @58s 9 +5,6865s (@ )5 6,5866,
6+ :(= +(s8 s6566+(58 ,4)8 5 8 5868=s
()668= 8 +58654 (s ( 65 +5+95> 8 (4,689 s4,
J( 9@6 :(5(:58s <(5s 9 4849
(+865s )(s, 5 68s 65 +5+95 (ssss:58
(b! gather sufficient appropriate audit e+idence to confir$ or dispel whether or not a $aterial
uncertainty e'ists through carrying out procedures considered necessary) including considering the effect of any plans of $anage$ent and other
$itigating factors (5,
(c! see: written representations fro$
$anage$ent regarding its plans for future action
A4,68 C5+4s65s (5, R<9865
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(s ( 65 +5+95.
A $aterial uncertainty e'ists when the $agnitude of its potential i$pact is such that) in the auditors *udg$ent) clear disclosure of the nature and i$plications of the uncertainty is necessary for the presentation of the financial state$ents not to be $isleading
PSA $%
MANAGEMENT REPRESENTATIONS
T (4,689 s4, )8(65 @6,5+ 8(8
:(5(:58 (+5,s 68s 9s<5s6)668= 9 8 (69 <9s58(865 8 65(5+6( s8(8:58s 65 (++9,(5+ 68 59(= (++<8, (++45865
<965+6<s 65 8 P66<<65s> (5, (s (<<9@, 8
65(5+6( s8(8:58s The auditor can obtain e+idence of $anage$ent>s ac:nowledg$ent of such
responsibility and appro+al fro$ rele+ant $inutes of
$eetings of the board of directors or si$ilar body or by obtaining a written representation fro$ $anage$ent or a signed copy of the financial state$ents
R<9s58(865s )= M(5(:58 (s A4,68 E@6,5+
T (4,689 s4, )8(65 96885 9<9s58(865s
9: :(5(:58 5 :(889s :(896( 8 8
65(5+6( s8(8:58s 5 89 s46+658
(<<9<96(8 (4,68 @6,5+ +(558 9(s5()= )
<+8, 8 6s8 The possibility of
$isunderstandings between the auditor and
$anage$ent is reduced when oral representations are confir$ed by $anage$ent in writing
3uring the course of an audit) $anage$ent $a:es
$any representations to the auditor) either unsolicited or in response to specific inuiries /hen such
representations relate to $atters which are $aterial to the financial state$ents) the auditor will need to%
(a! see: corroborati+e audit e+idence fro$ sources inside or outside the entity
(b! e+aluate whether the representations $ade by
$anage$ent appear reasonable and consistent with other audit e+idence obtained) including other
representations and
(c! consider whether the indi+iduals $a:ing the representations can be e'pected to be well infor$ed on the particular $atters
E(:< ( M(5(:58 R<9s58(865 L889
The following letter is not intended to be a standard letter
Representations by $anage$ent will +ary fro$ one entity to another and fro$ one period to the ne't
(.ntity etterhead!
(3ate!
(To Auditor!
This representation letter is pro+ided in connection with your audit of the financial state$ents of A;C Co$pany for the year ended 3ece$ber B") 20G" for the purpose of
e'pressing an opinion as to whether the financial state$ents present fairly) in all $aterial respects) the financial position of A;C Co$pany as of 3ece$ber B") 20G" and of the results
of its operations and its cash flows for the year then ended in accordance with generally accepted accounting principles in the Philippines
/e ac:nowledge our responsibility for the fair presentation of the financial state$ents in accordance with generally accepted accounting principles in the Philippines
/e confir$) to the best of our :nowledge and belief) the following representations%
Include here representations relevant to the entity. Such representations may include:
• There have been no irregularities involving
management or employees who have a significant role in the accounting and internal control systems or that could have a material effect on the financial
statements.
• We have made available to you all books of accounts and supporting documentation and all minutes of
meetings of shareholders and the board of directors
namely those held on !arch "#$ %&'" and September (&$ %&'"$ respectively).
• We confirm the completeness of the information
provided regarding the identification of related parties.
• The financial statements are free of material misstatements$ including omissions.
• The *ompany has complied with all aspects of contractual agreements that could have a material effect on the financial statements in the event of
noncompliance. There has been no noncompliance with re+uirements of regulatory authorities that could
have a material effect on the financial statements in the event of noncompliance.
• The following have been properly recorded and when appropriate$ ade+uately disclosed in the financial
statements:
a) The identity of$ and balances and transactions with$
related parties.
b) ,osses arising from sale and purchase commitments.
c) -greements and options to buy back assets previously sold.
d) -ssets pledged as collateral.
• We have no plans or intentions that may materially alter the carrying value or classification of assets and
liabilities reflected in the financial statements.
• We have no plans to abandon lines of product or other plans or intentions that will result in any ecess or
obsolete inventory$ and no inventory is stated at an amount in ecess of net reali/able value.
• The *ompany has satisfactory title to all assets and there are no liens or encumbrances on the company0s assets$ ecept for those that are disclosed in 1ote ' to the financial statements.
• We have recorded or disclosed$ as appropriate$ all liabilities$ both actual and contingent$ and have disclosed in 1ote ' to the financial statements all guarantees that we have given to third parties.
• Other than 22.. described in 1ote ' to the financial statements$ there have been no events subse+uent to period end which re+uire ad3ustment of or disclosure in
the financial statements or 1otes thereto.
• The 22 claim by '45 *ompany has been settled for the total sum of ''' which has been properly accrued in the financial statements. 1o other claims in
connection with litigation have been or are epected to be received.
• There are no formal or informal compensating balance arrangements with any of our cash and investment
accounts. 6cept as disclosed in 1ote ' to the financial statements$ we have no other line of credit
arrangements.
• We have properly recorded or disclosed in the financial statements the capital stock repurchase options and agreements$ and capital stock reserved for options$
warrants$ conversions and other re+uirements.
KKKKKKKKKKKKKKKKKKKK Senior .'ecuti+e fficer KKKKKKKKKKKKKKKKKKKK
Senior ,inancial fficer
THE INDEPENDENT AUDITORS REPORT ON A COMPLETE SET OF GENERAL PURPOSE FINANCIAL
STATEMENTS JPSA 7%% R@6s,
The following are the ele$ents of the auditors report when the audit has been conducted in accordance with the PSAs%
(a! Title
(b! Addressee
(c! &ntroductory paragraph
(d! -anage$ents responsibility for the financial state$ents
(e! Auditors responsibility
(f! Auditors opinion
(g! ther reporting responsibilities
(h! Auditors signature
(i! 3ate of the auditors report and (*! Auditors address
T68
T (4,689s 9<98 s4, (@ ( 868 8(8 +(9=
65,6+(8s 8(8 68 6s 8 9<98 (5 65,<5,58 (4,689.
A title indicating the report is the report of an independent auditor) for e'a$ple) I&ndependent Auditors Report)J affir$s that the auditor has $et all of the rele+ant ethical reuire$ents regarding independence and) therefore) distinguishes the independent auditors report fro$ reports issued by others
A,,9ss
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I589,4+89= P(9(9(<
T 6589,4+89= <(9(9(< 65 8 (4,689s 9<98 s4, 6,586= 8 5868= s 65(5+6( s8(8:58s
(@ )5 (4,68, (5, s4, s8(8 8(8 8 65(5+6(
s8(8:58s (@ )5 (4,68,. T 6589,4+89=
<(9(9(< s4, (s
(a! I,586= 8 868 (+ 8 65(5+6( s8(8:58s 8(8 +:<96s 8 +:<8 s8 65(5+6(
s8(8:58s
(b! R9 8 8 s4::(9= s6566+(58 (++45865
<6+6s (5, 89 <(5(89= 58s (5,
(c! S<+6= 8 ,(8 (5, <96, +@9, )= 8 65(5+6(
s8(8:58s.
M(5(:58s Rs<5s6)668= 9 8 F65(5+6(
S8(8:58s
T (4,689s 9<98 s4, s8(8 8(8 :(5(:58 6s 9s<5s6) 9 8 <9<(9(865 (5, 8 (69
<9s58(865 8 65(5+6( s8(8:58s 65 (++9,(5+
68 8 (<<6+() 65(5+6( 9<9865 9(:9 (5, 8(8 86s 9s<5s6)668= 65+4,s
(a! Ds6565> 6:<:5865 (5, :(658(6565 65895(
+589 9@(58 8 8 <9<(9(865 (5, (69
<9s58(865 65(5+6( s8(8:58s 8(8 (9 9 9:
:(896( :6ss8(8:58> 89 ,4 8 9(4, 9 999
(b! S+865 (5, (<<=65 (<<9<96(8 (++45865
<6+6s (5,
(c! M(65 (++45865 s86:(8s 8(8 (9 9(s5() 65 8 +69+4:s8(5+s.
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T (4,689s 9<98 s4, s8(8 8(8 8 9s<5s6)668=
8 (4,689 6s 8 <9ss (5 <6565 5 8 65(5+6(
s8(8:58s )(s, 5 8 (4,68.
The auditors report states that the auditors responsibility is to e'press an opinion on the financial state$ents based on the audit in order to contrast it to $anage$ents responsibility for the preparation and fair presentation of the financial state$ents
T (4,689s 9<98 s4, s8(8 8(8 8 (4,68 (s +5,4+8, 65 (++9,(5+ 68 P66<<65 S8(5,(9,s 5 A4,6865. T (4,689s 9<98 s4, (s <(65 8(8
8s s8(5,(9,s 9469 8(8 8 (4,689 +:<= 68
86+( 9469:58s (5, 8(8 8 (4,689 <(5 (5,
<99: 8 (4,68 8 )8(65 9(s5() (ss49(5+
89 8 65(5+6( s8(8:58s (9 9 9: :(896(
:6ss8(8:58.
T (4,689s 9<98 s4, ,s+96) (5 (4,68 )=
s8(865 8(8
(a! A5 (4,68 65@@s <99:65 <9+,49s 8 )8(65 (4,68 @6,5+ ()48 8 (:458s (5, ,6s+s49s 65 8 65(5+6( s8(8:58s
(b! T <9+,49s s+8, ,<5, 5 8 (4,689s 4,:58> 65+4,65 8 (ssss:58 8 96ss
:(896( :6ss8(8:58 8 65(5+6( s8(8:58s>
89 ,4 8 9(4, 9 999. I5 :(65 8s 96s
(ssss:58s> 8 (4,689 +5s6,9s 65895( +589
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,s65 (4,68 <9+,49s 8(8 (9 (<<9<96(8 65 8
+69+4:s8(5+s> )48 58 9 8 <49<s <9ss65
(5 <6565 5 8 +86@5ss 8 5868=s 65895(
+589. I5 +69+4:s8(5+s 5 8 (4,689 (s (s ( 9s<5s6)668= 8 <9ss (5 <6565 5 8
+86@5ss 65895( +589 65 +545+865 68
8 (4,68 8 65(5+6( s8(8:58s> 8 (4,689 s4, :68 8 <9(s 8(8 8 (4,689s +5s6,9(865 65895( +589 6s 58 9 8 <49<s
<9ss65 (5 <6565 5 8 +86@5ss
65895( +589 (5,
(c! A5 (4,68 (s 65+4,s @(4(865 8
(<<9<96(85ss 8 (++45865 <6+6s 4s,> 8
9(s5()5ss (++45865 s86:(8s :(, )=
:(5(:58> (s (s 8 @9( <9s58(865 8
65(5+6( s8(8:58s.
T (4,689s 9<98 s4, s8(8 8(8 8 (4,689 )6@s 8(8 8 (4,68 @6,5+ 8 (4,689 (s
)8(65, 6s s46+658 (5, (<<9<96(8 8 <9@6, ( )(s6s 9 8 (4,689s <6565.
A4,689s O<6565
A5 454(66, <6565 s4, ) <9ss, 5 8
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9s<+8s> 65 (++9,(5+ 68 8 (<<6+() 65(5+6(
9<9865 9(:9.
W5 <9ss65 (5 454(66, <6565> 8 <6565
<(9(9(< 8 (4,689s 9<98 s4, s8(8 8
(4,689s <6565 8(8 8 65(5+6( s8(8:58s 6@ ( 894 (5, (69 @6 9 <9s58 (69=> 65 ( :(896(
9s<+8s> 65 (++9,(5+ 68 8 (<<6+() 65(5+6(
9<9865 9(:9 J45ss 8 (4,689 6s 9469, )=
( 9 94(865 8 4s ,6958 9,65 9 8
<6565> 65 6+ +(s 8 <9s+96), 9,65 s4, ) 4s,.
W5 P66<<65 F65(5+6( R<9865 S8(5,(9,s 9 P66<<65 P4)6+ S+89 A++45865 S8(5,(9,s (9 58 4s, (s 8 65(5+6( 9<9865 9(:9> 8
995+ 8 8 65(5+6( 9<9865 9(:9 65 8
9,65 8 <6565 s4, 6,586= 8 496s,6+865
9 +4589= 9665 8 65(5+6( 9<9865
9(:9.
O89 R<9865 Rs<5s6)6686s
&n so$e *urisdictions) the auditor $ay ha+e additional responsibilities to report on other $atters that are supple$entary to the auditors responsibility to e'press an opinion on the financial state$ents ,or e'a$ple) the auditor $ay be as:ed to report certain $atters if they co$e to the auditors attention during the course of the audit of the financial state$ents Alternati+ely) the auditor $ay be as:ed to perfor$ and report on additional specified procedures) or to e'press an opinion on specific $atters) such as the adeuacy of accounting boo:s and records
Auditing standards in the specific *urisdiction or country often pro+ide guidance on the auditors responsibilities with respect to specific additional reporting responsibilities in that *urisdiction or country
W5 8 (4,689 (,,9sss 89 9<9865
9s<5s6)6686s 6865 8 (4,689s 9<98 5 8
65(5+6( s8(8:58s> 8s 89 9<9865
9s<5s6)6686s s4, ) (,,9ss, 65 ( s<(9(8
s+865 65 8 (4,689s 9<98 8(8 s 8 <6565
<(9(9(<.
The auditor addresses these other reporting responsibilities in a separate section of the report in order to clearly distinguish the$ fro$ the auditors responsibilities for) and opinion on) the financial state$ents
A4,689s S65(849
T (4,689s 9<98 s4, ) s65,.
The auditors signature is either in the na$e of the audit fir$) the personal na$e of the auditor or both) as appropriate for the particular *urisdiction &n addition to the
auditors signature) in certain *urisdictions) the auditor $ay be reuired to declare the auditors professional accountancy designation or the fact that the auditor or fir$) as appropriate) has been recogni?ed by the appropriate licensing authority in that *urisdiction
D(8 8 A4,689s R<98
T (4,689 s4, ,(8 8 9<98 5 8 65(5+6(
s8(8:58s 5 (969 8(5 8 ,(8 5 6+ 8
(4,689 (s )8(65, s46+658 (<<9<96(8 (4,68
@6,5+ 5 6+ 8 )(s 8 <6565 5 8 65(5+6(
s8(8:58s. S46+658 (<<9<96(8 (4,68 @6,5+
s4, 65+4, @6,5+ 8(8 8 5868=s +:<8 s8
65(5+6( s8(8:58s (s )5 <9<(9, (5, 8(8 8s 68 8 9+56, (48968= (@ (ss98, 8(8 8= (@ 8(5 9s<5s6)668= 9 8:.
The date of the auditors report infor$s the reader that the auditor has considered the effect of e+ents and transactions of which the auditor beca$e aware and that occurred up to that date The auditors responsibility for e+ents and transactions after the date of the auditors report is addressed in PSA #L0) ISubseuent .+entsJ
Since the auditors opinion is pro+ided on the financial state$ents and the financial state$ents are the responsibility of $anage$ent) the auditor is not in a position to conclude that sufficient appropriate audit e+idence has been obtained until the auditor obtains e+idence that a co$plete set of financial state$ents has been prepared and $anage$ent has accepted responsibility for the$
A4,689s A,,9ss
T 9<98 s4, 5(: 8 +(865 65 8 +4589= 9 496s,6+865 9 8 (4,689 <9(+86+s.
A4,689s R<98
T (4,689s 9<98 s4, ) 65 96865.
&43.P.43.4T A3&TRS R.PRT 7-ppropriate -ddressee8
R<98 5 8 F65(5+6( S8(8:58s
/e ha+e audited the acco$panying financial state$ents of A;C Co$pany) which co$prise the balance sheet as at
3ece$ber B") 20G") and the inco$e state$ent) state$ent of changes in euity and cash flow state$ent for the year then ended) and a su$$ary of significant accounting policies and other e'planatory notes
!anagement9s esponsibility for the Financial Statements -anage$ent is responsible for the preparation and fair presentation of these financial state$ents in accordance with Philippine ,inancial Reporting Standards This
responsibility includes% designing) i$ple$enting and
$aintaining internal control rele+ant to the preparation and fair presentation of financial state$ents that are free fro$
$aterial $isstate$ent) whether due to fraud or error
selecting and applying appropriate accounting policies and
$a:ing accounting esti$ates that are reasonable in the circu$stances
-uditor9s esponsibility
ur responsibility is to e'press an opinion on these financial state$ents based on our audit /e conducted our audit in accordance with Philippine Standards on Auditing Those standards reuire that we co$ply with ethical reuire$ents and plan and perfor$ the audit to obtain reasonable assurance whether the financial state$ents are free fro$
$aterial $isstate$ent
An audit in+ol+es perfor$ing procedures to obtain audit e+idence about the a$ounts and disclosures in the financial state$ents The procedures selected depend on the auditors *udg$ent) including the assess$ent of the ris:s of
$aterial $isstate$ent of the financial state$ents) whether due to fraud or error &n $a:ing those ris: assess$ents) the auditor considers internal control rele+ant to the entitys preparation and fair presentation of the financial state$ents in order to design audit procedures that are appropriate in the circu$stances) but not for the purpose of e'pressing an opinion on the effecti+eness of the entitys internal control
An audit also includes e+aluating the appropriateness of accounting policies used and the reasonableness of accounting esti$ates $ade by $anage$ent) as well as e+aluating the o+erall presentation of the financial state$ents
/e belie+e that the audit e+idence we ha+e obtained is sufficient and appropriate to pro+ide a basis for our audit opinion
Opinion
&n our opinion) the financial state$ents present fairly$ in all material respects$ the financial position of A;C Co$pany as of 3ece$ber B") 20G") and of its financial perfor$ance and its cash flows for the year then ended in accordance with Philippine ,inancial Reporting Standards
R<98 5 O89 L( (5, R4(89= R469:58s
7Form and content of this section of the auditor9s report will vary depending on the nature of the auditor9s other reporting responsibilities.8
7-uditor9s signature8
7;ate of the auditor9s report8 7-uditor9s address8
M,66+(865s 8 8 I5,<5,58 A4,689s R<98 PSA 7%1
!atters that ;o 1ot -ffect the -uditor0s Opinion (a! .$phasis of $atter
!atters that ;o -ffect the -uditor0s Opinion (a! Mualified opinion)
(b! 3isclai$er of opinion) or (c! Ad+erse opinion
M(889s 8(8 D N8 A+8 8 A4,689s O<6565
&n certain circu$stances) an auditor>s report $ay be
$odified by adding an e$phasis of $atter paragraph to highlight a $atter affecting the financial state$ents which is included in a note to the financial state$ents that $ore e'tensi+ely discusses the $atter The addition of such an e$phasis of $atter paragraph does not affect the auditor>s opinion The paragraph would preferably be included after the paragraph containing the auditor>s opinion but before the section on any other reporting responsibilities) if any
The e$phasis of $atter paragraph would ordinarily refer to the fact that the auditor>s opinion is not ualified in this respect
T (4,689 s4, +5s6,9 :,6=65 8 (4,689s 9<98 )= (,,65 ( <(9(9(< 6 89 6s ( s6566+(58 45+98(658= J89 8(5 ( 65 +5+95 <9):> 8
9s4865 6+ 6s ,<5,58 4<5 4849 @58s (5, 6+ :(= (+8 8 65(5+6( s8(8:58s. An uncertainty is a $atter whose outco$e depends on future actions or e+ents not under the direct control of the entity but that $ay affect the financial state$ents
An illustration of an e$phasis of $atter paragraph for a significant uncertainty in an auditor>s report follows%
<Without +ualifying our opinion we draw attention to 1ote ' to the financial statements. The *ompany is the defendant in a lawsuit alleging infringement of certain patent rights and claiming royalties and punitive damages.
The *ompany has filed a counter action$ and preliminary0
hearings and discovery proceedings on both actions are in progress. The ultimate outcome of the matter cannot presently be determined$ and no provision for any liability that may result has been made in the financial statements. <
M(889s 8(8 D A+8 8 A4,689s O<6565
An auditor $ay not be able to e'press an unualified opinion when either of the following circu$stances e'ists and) in the auditor>s *udg$ent) the effect of the $atter is or
$ay be $aterial to the financial state$ents%
(a! There is a li$itation on the scope of the auditor>s wor:
or
(b! There is a disagree$ent with $anage$ent regarding the acceptability of the accounting policies selected) the
$ethod of their application or the adeuacy of financial state$ent disclosures
A 2uali'ied o*inion s4, ) <9ss, 5 8
(4,689 +5+4,s 8(8 (5 454(66, <6565 +(558 ) <9ss, )48 8 +8 (5= ,6s(9:58 68
:(5(:58> 9 6:68(865 5 s+< 6s 58 s :(896(
(5, <9@(s6@ (s 8 9469 (5 (,@9s <6565 9 ( ,6s+(6:9 <6565. A 4(66, <6565 s4, )
<9ss, (s )65 +<8 9 8 +8s 8
:(889 8 6+ 8 4(66+(865 9(8s.
A disclaimer o' o*inion s4, ) <9ss, 5 8 <ss6) +8 ( 6:68(865 5 s+< 6s s
:(896( (5, <9@(s6@ 8(8 8 (4,689 (s 58 )5 () 8 )8(65 s46+658 (<<9<96(8 (4,68 @6,5+
(5, (++9,65= 6s 45() 8 <9ss (5 <6565 5 8 65(5+6( s8(8:58s.
A5 adverse o*inion s4, ) <9ss, 5 8
+8 ( ,6s(9:58 6s s :(896( (5, <9@(s6@
8 8 65(5+6( s8(8:58s 8(8 8 (4,689 +5+4,s 8(8 ( 4(66+(865 8 9<98 6s 58 (,4(8 8
,6s+s 8 :6s(,65 9 65+:<8 5(849 8
65(5+6( s8(8:58s.
C69+4:s8(5+s 8(8 :(= Rs48 65 O89 8(5 (5 U54(66, O<6565 L6:68(865 5 S+<
A li$itation on the scope of $e auditor>s wor: $ay so$eti$es be i$posed by the entity (for e'a$ple) when
A li$itation on the scope of $e auditor>s wor: $ay so$eti$es be i$posed by the entity (for e'a$ple) when