Objective: ISA 570 Going Concern
Objective: ISA 570 Going Concern
Objective: ISA 570 Going Concern
GOING CONCERN
OBJECTIVE
Under the going concern assumption, an entity is viewed as continuing in business for the foreseeable future. When the use
of the going concern assumption is appropriate, assets and liabilities are recorded on the basis that the entity will be able to
realize / disposed it in the normal course of business.
RESPONSIBLITIES
MANAGEMENT
AUDITOR
Management’s assessment of the entity’s ability The auditor’s responsibility is to obtain sufficient
to continue as a going concern involves making appropriate audit evidence about the appropriateness of
a judgment. The following factors are relevant assumption used by management in the preparation of
to that judgment: the FS and to conclude whether material uncertainty exist
• The degree of uncertainty associated with the or not
outcome of an event or condition.
• The size and complexity of the entity, the
nature and condition of its business and the
degree to which it is affected by external
factors.
• Any judgment about the future is based on
information available. Subsequent events may
result in outcomes that are inconsistent with
judgments.
REQUIREMENT
YES NO
The auditor shall discuss the assessment with The auditor shall discuss with management
management and determine whether management the basis for intended use of the going
has identified events or conditions that may cast concern assumption, and inquire about
significant doubt on the entity’s ability to continue events or conditions
as a going concern, if so, management’s plans to
address them.
!!!The auditor shall remain alert through the audit for audit evidence of events or conditions.
FINANCIALS
Inability to comply with Change from credit to cash-on- Inability to obtain financing for essential
the terms of loan delivery transactions with new product development or other
agreements. suppliers. essential investments.
OPERATING
Loss of a major
Management intentions market, key Labor difficulties.
Loss of key management
to liquidate the entity or customer(s),
without replacement.
to cease operations. franchise, license, or
principal supplier(s).
OTHERS
Analyzing and discussing the cash flow, profit and other relevant forecasts with the management.
Analyzing and discussing latest available interim financial statements
Reading the terms of debentures and loan agreements
Reading minutes of the meetings of shareholders, TCWG and relevant committees for reference to financing difficulties.
Inquiring entity’s legal counsel regarding existence of litigation and claims and reasonableness of management’s
assessments of their outcome and estimate of their financial implications.
Performing audit procedures regarding subsequent events
Confirming existence, terms and adequacy of the borrowing facilities
Obtaining and reviewing reports of regulatory actions.
Requesting written representations from management and those charged with governance regarding their plans for the future
actions and feasibility of those plans.
If there is significant delay in approval of the financial statements by management or those charged with
governance after the date of financial statements, auditor shall inquire the reasons for the delay. If the
auditor believes that the delay could be related to events or conditions relating to the going concern
assessment, the auditor shall perform necessary additional audit procedures.
Event or condition
Yes No
Yes No Yes No
Clean Q or adverse
Yes No
Clean+ M M+P
MURTGC Q Adverse
Report