EY's AirAsia not qualified but material uncertainties about going concern assumptions audit opinion farcical at best -SC needs to commence investigation into EY's relationship with AA , and EY may be exposed to share, bondholder and creditor class actions

by Ganesh Sahathevan

Yahoo Finance and others have reported that AirAsia Ltd's auditor Ernst & Young (EY) 

has issued an audit report which "said there were material uncertainties that cast doubt on the budget carrier's ability to continue as a going concern".

EY has however also stated that the audit report is not qualified, despite the financial statements being prepared on the basis that the assumption of a going concern holds.

It does look as EY has determined that it will not utter in its audit report the words "qualified" for fear that it could trigger lending covenants. However, the idiotic formulation of words is not likely to save EY from being sued by creditors and bondholders for AirAsia related damages.

The same might be said of shareholders.

Meanwhile the above is clearly an issue for the Securities Commission.The SC needs to commence an investigation into EY's AirAsia audits. 

END