Goingconcern_AA_Ch_33

Goingconcern_AA_Ch_33 - © Peter T Y Lau and Nelson C Y Lam...

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Unformatted text preview: © Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 1 Chapter 33 Review of Going Concern Status © Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 2 Agenda 1. Introduction 2. Management’s Responsibility 3. Auditor’s Responsibility 4. Risk Assessment Procedures and Related Activitie 5. Evaluating Management’s Assessment 6. Further Audit Procedures 7. Audit Conclusions and Reporting © Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 3 1. Introduction • Unless otherwise stated in the auditor’s report, it is assumed: – the financial statements are prepared under the going concern assumption; and – the entity does not have any going concern problem. © Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 4 2. Management’s Responsibility • Make an assessment of an entity’s ability to continue as a going concern © Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 5 3. Auditor’s Responsibility • Consider appropriateness of management's use of going concern assumption in the preparation and presentation of the financial statements • Conclude whether there is a material uncertainty about the entity’s ability to continue as a going concern © Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 6 4. Risk Assessment Procedures and Related Activities • When performing risk assessment procedures, consider whether any events or conditions casting significant doubt on the entity's ability to continue as a going concern • Remain alert on the entity's ability to continue as a going concern throughout the audit © Peter T. Y. Lau and Nelson C. Y. Lam © Pilot Publishing Co. Ltd. 2009 Auditing and Assurance in Hong Kong 7 4. Risk Assessment Procedures and Related Activities • Financial indications: – Net liability or net current liability position; – Fixed-term borrowings approaching maturity without realistic prospects of renewal or repayment;...
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This note was uploaded on 12/21/2010 for the course ACCT 410 taught by Professor Sallyli during the Fall '10 term at Hong Kong Shue Yan.

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Goingconcern_AA_Ch_33 - © Peter T Y Lau and Nelson C Y Lam...

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