L2 Notes_Part_2 - Going Concern Judgment Environment How...

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Going Concern Judgment competition, outdated products Key customer lost, litigation Uninsure loss, new laws & regs Management’s plans Mitigating factors: cost cutting, new financing Losses, W/C deficiency, negative trends Likelihood of Operations Ceasing Going Concern Judgment How Many Cues? How much evidence? = f(information search costs, availability, audit and engagement risk) What kind of evidence? When to collect? What weight to put on each cue? Auditor’s Judgment Reality Auditor Environment
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Materiality Judgment Bond covenant constraints - accounting Loss v. gain, audit/engageme nt risk Management fraud Size relative to NI, revenue, TA Financial analyst’s expectations, Dollar magnitude of item Matter could affect a User’ s Decision Important
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This note was uploaded on 10/05/2011 for the course ACG 5637 taught by Professor Monikacaushoulli during the Fall '08 term at University of Florida.

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L2 Notes_Part_2 - Going Concern Judgment Environment How...

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