Problem
Concern Uncertainty and Audit Reporting:
The auditors of the CRX Inc. (CRX) financial statements for the year ended December 31, 20X7, have decided that there is substantial doubt that CRX can continue to exist as a going concern, because the company has experienced significant operating losses since 20X5 and has had to get permission from its lenders to postpone its debt payment requirements. CRX's management has agreed to describe the problems in the president's message to the shareholders in their annual report, but has decided not to reflect this situation in the notes to the financial statements.
Task
Discuss fully the type of audit opinion to be issued in this situation, including a description of any modifications that would be necessary to the standard audit report. Describe what change(s) would be necessary for CRX to obtain an unqualified audit opinion in this case.