Chapter 2 Going concern

ACCA detailed syllabus

?  Define and discuss the significance of the concept of going concern.

?  Explain the importance of and the need for going concern reviews.

?  Explain the respective responsibilities of auditors and management regarding going concern.

?  Identify and explain potential indicators that an entity is not a going concern.

?  Discuss the procedures to be applied in performing going concern reviews.

?  Discuss the disclosure requirements in relation to going concern issues.

?  Discuss the reporting implications of the findings of going concern reviews.

1.1 Going concern

?  Going concern refers to the assumption that an entity is viewed as continuing in business for the foreseeable future.

?  When the use of the going concern assumption is appropriate, assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge its liabilities in the normal course of business.