PSA 570 - Philippine Standard on Auditing 570 GOING CONCERN...

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Philippine Standard on Auditing 570 GOING CONCERN
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PHILIPPINE STANDARD ON AUDITING 570 GOING CONCERN CONTENTS PSA 570 Introduction Management’s Responsibility Auditor’s Responsibility Planning Considerations Evaluating Management’s Assessment Period Beyond Management’s Assessment Additional Audit Procedures When Events or Conditions are Identified Audit Conclusions and Reporting Significant Delay in the Signature or Approval of Financial Statements Effective Date Acknowledgment Paragraphs 1-2 3-8 9-10 11-16 17-21 22-25 26-29 30-38 39 40-41 42-43
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PSA 570 Philippine Standards on Auditing (PSAs) are to be applied in the audit of financial statements. PSAs are also to be applied, adapted as necessary, to the audit of other information and to related services. PSAs contain the basic principles and essential procedures (identified in bold type black lettering) together with related guidance in the form of explanatory and other material. The basic principles and essential procedures are to be interpreted in the context of the explanatory and other material that provide guidance for their application. To understand and apply the basic principles and essential procedures together with the related guidance, it is necessary to consider the whole text of the PSA including explanatory and other material contained in the PSA not just that text which is black lettered. In exceptional circumstances, an auditor may judge it necessary to depart from a PSA in order to more effectively achieve the objective of an audit. When such a situation arises, the auditor should be prepared to justify the departure. PSAs need only be applied to material matters. The PSAs issued by the Auditing Standards and Practices Council (Council) are based on International Standards on Auditing (ISAs) issued by the International Auditing Practices Committee of the International Federation of Accountants. The ISAs on which the PSAs are based are generally applicable to the public sector, including government business enterprises. However, the applicability of the equivalent PSAs on Philippine public sector entities has not been addressed by the Council. It is the understanding of the Council that this matter will be addressed by the Commission on Audit itself in due course. Accordingly, the Public Sector Perspective set out at the end of an ISA has not been adopted into the PSAs.
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Introduction PSA 570 1. 2. The purpose of this Philippine Standard on Auditing (PSA) is to establish standards and provide guidance on the auditor’s responsibility in the audit of financial statements with respect to the going concern assumption used in the preparation of the financial statements, including considering management’s assessment of the entity’s ability to continue as a going concern. When planning and performing audit procedures and in evaluating the
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PSA 570 - Philippine Standard on Auditing 570 GOING CONCERN...

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