Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Going concern responsibilities
- This topic has 3 replies, 2 voices, and was last updated 6 years ago by Anuja Nair.
- AuthorPosts
- November 16, 2017 at 12:41 pm #416089
Hi sir, is it true that auditors have a responsibility to report to the directors in relation to any events or conditions which may cast doubt on the company’s ability to continue as a going concern ?
If so, why ?
Because the directors are already required to disclose in the financial statements, the principal events or conditions that cast significant doubt on the entity’s ability to continue as a going concern.
So, why should the auditors report to the directors , regarding something that is already known by the directors ?
November 16, 2017 at 2:09 pm #416097I’m confused sir. The auditor should report regarding the going concern of the client, to the client itself or to the shareholders ?
November 16, 2017 at 3:53 pm #416110It is the directors responsibility to assess going concern. It is the auditor’s duty to audit that assessment. Obviously any difference of opinion will be discussed between the directors and auditors.If the directors think there is no going concern problem and no mention is made in the FS, the audit opinion will be modified. If there are doubts about GC and this is mentioned in the FS, the audit report will contain a paragraph pointing out the doubt (but that is not a modified opinion).
November 16, 2017 at 4:23 pm #416124Okay sir. I get it now. Thank you.
- AuthorPosts
- The topic ‘Going concern responsibilities’ is closed to new replies.