Recently, PWC Singapore issued Disclaimer Audit Opinion for its client, Rickmers Maritime in view of the Group's uncertainties to continue as a going concern enity.
For our Accounting & Auditing readers, you can find media coverages on this matter via website. For now, let's look at what's a Disclaimer Audit Opinion.
According to Singapore Auditign on Standard (SSA 701),
"13. A disclaimer of opinion should be expressed when the possible effect of a limitation on scope is so material and pervasive that the auditor has not been able to obtain sufficient appropriate audit evidence and accordingly is unable to express an opinion on the financial statements. " (Source: Singapore Auditing Standard)
As above, a disclaimer audit opinion indicates that the auditor is unable to express an audit opinion on the Group's financial statement.
Example of limitation of scope mentioned above is also quoted in SSA 701:
"17. A scope limitation may be imposed by circumstances (for example, when the timing of the auditor’s appointment is such that the auditor is unable to observe the counting of physical inventories). It may also arise when, in the opinion of the auditor, the entity’s accounting records are inadequate or when the auditor is unable to carry out an audit procedure believed to be desirable. In these circumstances, the auditor would attempt to carry out reasonable alternative procedures to obtain sufficient appropriate audit evidence to support an unqualified opinion."
In the case of Rickmers Maritime, due to the doubt on the ability in obtaining waiver for breach of loan covenant and contingent liability arising from unfulfilled capital commitments, PWC has issued a Disclaimer Audit Opinion.