IAASB: Going Concern Assumption Must Remain in Auditor Focus
As the effects of the financial crisis and an uncertain economy continue to create volatility in the markets, the International Auditing and Assurance Standards Board has reiterated its position that auditors and those charged with corporate governance that management's use of the going concern assumption is a matter to be considered on every audit engagement.
“Difficult economic conditions give rise to many important audit considerations, but none more important — or more difficult—than evaluating management’s assessment of an entity’s ability to continue as a going concern and determining the appropriate auditor reporting in the circumstances,” said Professor Arnold Schilder, chairman of the IAASB. “Auditors must remain alert throughout the audit for evidence of events or conditions that may cast significant doubt on an entity’s ability to continue as a going concern."
Schilder referenced the IAASB's 2009 Staff Audit Practice Alert: “Audit Considerations in Respect of Going Concern in the Current Economic Environment,” which highlights the consideration of the going concern assumption in the preparation of financial statements.
"Auditors are encouraged to review the Alert and, importantly, the relevant requirements in the International Standards on Auditing,” added Schilder.
Start free ReadyRatios
reporting tool now!
Last Accounting News
- IASB Confirms One-year Delay for IFRS 17
- IFRS Foundation Publishes IFRS Taxonomy 2018
- IASB Urged to Improve Standards-setting Processes
- FSB Encourages Insurers to Act on the New Insurance Standard
- IFRS Foundation Trustees and the IASB Meets with the Japanese Stakeholders in the Wake of More Japanese companies Adopting IFRS Standards
- IASB Replaces IFRS 4 with the Issuance of a New Standard on Insurance Accounting
- IASB has Proposed Minor Amendments to IFRS 9 Relating to the Measurement of Financial assets with Prepayment Feature