Hi Megan
Thanks for your enquiry and apologies for the delay in responding:
1. The ASIC court action: AASB 137 and AASB 110 impact
The court action (outcome uncertain, adjourned) is a contingent liability under AASB 137. Directors should disclose its nature, the uncertainties, and where practicable, an estimate of the financial effect (or at least the range/maximum exposure per contravention if quantifiable, given you mention penalties could be substantial). If an outflow is actually probable and reliably measurable at any reporting date, that’s a provision, not just a contingent liability note.
Also, because these audits are so overdue, your subsequent events window (AASB 110) between the original balance dates and actual signing is unusually long. The court action and breach reports may need to come in as non-adjusting subsequent events for the earlier periods even though they didn’t exist at balance date. That’s the “can’t rewrite history” point, but it cuts the other way too: going concern under ASA 570 is assessed as at the date you sign each report, not just balance date, so even your earliest outstanding period needs to reflect what’s known now if it’s still relevant to that entity’s continuation.
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2. Going concern impact
If you conclude there’s a material uncertainty around going concern (which sounds likely, given potential fines and possible ASIC-driven outcomes like deregistration), and it’s adequately disclosed, ASA 570 requires a distinct “Material Uncertainty Related to Going Concern” section in the audit report. That’s a defined, separate section, not folded into an Emphasis of Matter paragraph. EOM under ASA 706 is then reserved for anything else you judge fundamental to users’ understanding that isn’t already covered by the MURGC section.
So, therefore: Unmodified opinion + MURGC is the right shape IF disclosures are adequate and evidence is sufficient. If disclosures aren’t adequate, you’re into a qualified or adverse opinion for inadequate disclosure of a material uncertainty (or of the contingent liability under AASB 137), independent of the going concern conclusion.
Another thing to consider: Given the combination of multiple contraventions, live court action, and going concern implications across several periods, this feels like exactly the kind of file that warrants an EQCR or a call to your technical/ethics standards line before you sign. Not because your reasoning is off, but because the judgement calls on quantifying exposure and assessing “adequate” disclosure are exactly where a second set of eyes earns its keep on a file ASIC is already watching closely.
Hope that helps! 😊