The International Audit and Assurance Standards Board has
released guidance on audit considerations with respect to going
concern in the current economic climate.
The alert was developed following a consultation and review of
similar guidance issued by national standard setters.
The alert highlights areas within International Standards on
Auditing (ISA), particularly ISA 570 Going Concern, which are
relevant in the current economic environment.
It points out that ISA 570 gives examples of events or
conditions that may cast significant doubt on the going concern
assumption, including a number of financial events becoming more
prevalent in the current environment. These include the inability
to comply with the terms of loan agreements and non-compliance with
capital or other statutory requirements.
The alert provides additional guidance for auditors in
evaluating management’s use of the going concern assumption.
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