Auditors don't endorse South Canterbury going concern view

Ernst & Young, who audited the interim financial statements of South Canterbury Finance for the first time, have abstained from giving their opinion on the directors' view that the entity is a going concern.

"Our opinion is not qualified in respect of these matters," Ernst & Young said after pointing out that there were uncertainties as to the outcome of each of the main assumptions and estimates on the basis of which the going concern view was formed.

The auditors noted that the validity of the view mainly depended on the generation of sufficient cash flows and other outcomes, and the interim financial statements do not include any adjustments that may be needed should the outcomes not be achieved.

This includes the likelihood that the group may have to provide for further liabilities; certain non-current assets and liabilities may have to be classified as current; and assets may be realised at less than their current value.

"We are unable to quantify the potential effect of these uncertainties," the auditors said.