[AUD] Going concern

1. Auditor's responsibility

Substantial doubt entity's ability to continue as a going concern, +1yrs

Not designed to ID substantial doubt

 

2. Audit Procedure

  1) procedures for other objectives are sufficient to id 

   Analytical procedure

   Subsequent Event

   L,C,A

   Minute

   Compliance

   conformation

 

2) conditions may indicate substantial doubt

   - recurring losses

   - negative cash flow from operating activities

   - unpaid dividend

 

3. Substantial doubt exists

 1) FS disclose

  - conditions and events giving rise to substantial doubt

  - possible effects

  - mgt evaluation of conditions and events(plan to mitigate)

  - possible discontinuance of operations

 

 2) Audit Reports

   FS disclosure, yes > UM + Going concern section

   FS disclosure, no > Q/A + Going concern section

   * beyond substantial doubt(not like to go beyond 1yr) > disclaimer

   * no substantial doubt > UM + EM

 

 3) Documentation(plan, disclose, reporting)

 - conditions that led to the belief that substantial doubt exists

 - mgt's mitigate plans

 - evidence obtained to evaluate mgt's plans

 - auditor's conclusion  

 - the effect of the auditor's conclusion on the auditor's report

 

* Comparative basis FS, PY(going concern), CY(going concern removed)

   > separate going concern section included in the PY, not repeated in CY

 

 

https://letslearnsomethingnew.tistory.com/203

[AUD] Subsequent Event