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AAA Technical Articles
1. Going Concern
2. Data Analytics and the Auditor
3. Auditing in specialised industries
4. IAASB exposure draft – Proposed International Standard on Auditing 540 (Revised)
5. Evaluation of misstatements
6. Responding to non-compliance with laws and regulations
7. Corporate governance and its impact on audit practice
8. Auditing disclosures in financial statements
9. Performance information in the public sector
10. Audit quality – a perpetual current issue
11. Professional scepticism
12. Auditor liability: ‘fair and reasonable’ punishment?
13. Continue to be rest assured
14. Completing the audit
15. Massaging the figures
16. Forensic auditing
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AAA Technical Articles
17. Auditors' reports to those charged with governance
18. Group auditing
19. Group audit issues
1) Going concern
The Paper P7 examiner describes the additional guidance given for ISA 570,
Going Concern
The recent global economic crisis, commonly referred to as the credit crunch, has
provided many challenges for both the preparers and the auditors of published financial
statements.
For auditors, ISA 570, Going Concern is a well-established source of guidance, and
additional direction has been provided by the IAASB's Practice Alert Audit
Considerations in Respect of Going Concern in the Current Economic Environment ,
issued in January 2009. In the UK, the APB issued the Bulletin Going Concern Issues
During the Current Economic Conditions in December 2008. Both of these are
examinable documents for the Paper P7 exams in 2010.
The auditor's objectives in relation to going concern
ISA 570 contains well-established guidance on going concern, including the following
objectives for the auditor:

to obtain sufficient appropriate audit evidence regarding the appropriateness of
management's use of the going concern assumption in the preparation of the financial
statements
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AAA Technical Articles

to conclude, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the entity's ability to continue
as a going concern, and

to determine the implications for the auditor's report.
All audits should involve an assessment of the appropriateness of the going concern
assumption, and it is obvious to say that the auditor may well have to perform additional
procedures when there are heightened risks relating to going concern, caused by
difficult economic and market conditions. But going concern should be considered at all
stages of the audit, not just in terms of specific procedures. It is important to remember
that going concern is not just something considered at a particular stage in the audit
cycle, but should be an issue that permeates the whole performance and review of an
audit.