Audit reports - going concern, Auditing

Audit Reports - Going Concern

In the vast widely of cases, the going to relate assumption is suitable and whether applied no mention require be made in the auditor's report.

In rare incidences, notes to the accounts may create reference to the going to relate assumption. This may involve references to continued favourable availability or trading of finance. It may be such then going to relate assumption is not in doubt, however for a full understanding of the accounts there is require for amplification of these notes.  In such cases, the auditor may utilize an emphasis of matter that is not a qualification and is allowed in ISA 700

Whenever the auditor has complete doubt that the going concern assumption so he may be necessary to qualify his report and this is a highly charged region for the auditor since an expression in his audit report such a company is not a going to relate may in itself bring about the closure of the company.  The auditor should consequently:

a) Not refrain from expressing a qualified thought even though this may lead to liquidation or receivership;

b) The auditor have to consider materiality, whether the adjustments required on abandoning the going to relate assumption are not material, then no qualification should be known;

c) Whether the auditor concludes such there is doubt then he has to consider the consequences for the figures in the accounts.  As an example, he should receive an estimate of the essential provision against stock or the redundancy payments.

In practice since of the complexities included in creating adjustments to the accounts and producing them on a break up basis, accounts in quite cases in US are produced on the going to relate assumption and qualified through the auditor on the grounds such the going concern assumption may not be suitable.

Posted Date: 1/28/2013 2:09:58 AM | Location : United States

Related Discussions:- Audit reports - going concern, Assignment Help, Ask Question on Audit reports - going concern, Get Answer, Expert's Help, Audit reports - going concern Discussions

Write discussion on Audit reports - going concern
Your posts are moderated
Related Questions
IFRS 5 Non-Current Assets IFRS 5 Non-Current Assets Held for Discontinued and Sale Operations The Discontinuing Operation is a component of an enterprise: (a)  Such the

Auditor's Procedures - Going Concern In forming a thought on the going to relate position of a company, the auditors have to: a) Examine the company, its plans for the futu

Requirements of the Companies Act Here the seventh schedule to the Companies Act gives the matters which must be expressly stated in the AUDITOR'S REPORT 1. Where they have

Assessment tasks: This assignment requires you to revisit the case of the collapse of US energy giant Enron Ltd. Your revisit starts with a reading of the excerpts from memos

Verification Procedures - Long-Term Liabilities a) Received a schedule detailing the sums due at the starting of the year, redemptions and additions and the sum due at the yea

IAS 27 - Audit Process IAS 27 applies to the presentation and preparation of consolidated financial statements for a group of entities within the control of a parent. It as w

Need of Assertions in Obtaining Audit Evidence Management is responsible for the fair presentation of financial statements which reflect the nature and operations of the entit

How do internal auditors add to the credibility of financial statements?

Counter - Indications That the auditor has found indications of going related to non-applicability does not of itself justify instantly conclusion that the entity is not a goi

Sufficiency - Sources of evidence The audit evidence should in total enable the auditor to form an opinion on the financial statements.  Sufficiency is a measure of evidence o