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Forums › ACCA Forums › ACCA AAA Advanced Audit and Assurance Forums › GOING CONCERN PROBLEM
WHY DIRECTORS ARE RELUCTANT TO DISCLOSE GOING CONCERN PROBLEMS OF COMPANY?
Hi Shahrukh,
Because it will have an impact on their business – the business may not continue trading and may not be able to get much needed overdrafts/ loans if they disclose going concern problems.
Competitors could target the companies for potential takeovers
It will also effect share prices, key staff may leave, banks could foreclose on loan arrangements, will effect recruitment of staff, suppliers may not provide the goods etc