ISA 570 (1)

Question 1

What is the going concern basis of accounting?

Answer 1

FSs are prepared on the assumption that entity is a going concern and will continue its operations for the foreseeable future

Question 2

How are general purpose financial statements prepared?

Answer 2

Using the going concern basis for accounting

Question 3

When are general purpose financial statements not done through going concern?

Answer 3

When managemetn intends to liquidate entity or to cease operations, or has no realistic alternnative but to do so

Question 4

What if the going concern basis is not appropriate?

Answer 4

The FSs are prepared on a break-up basis

Question 5

ISA 570 objectives of the auditor (audit evidence appropriateness)

Answer 5

Obtain sufficient appropriate audit evidence regarding, and conclude on appropriateness of management’s use of going concern basis of accounting

Question 6

ISA 570 objectives of the auditor (material uncertainty entity’s ability)

Answer 6

Conclude whether a material uncertainty exists related to events or conditions that may cast significant doubt on entity’s ability to continue as going concern

Question 7

ISA 570 objectives of the auditor (report)

Answer 7

To report in accordance with ISA 570

Question 8

What must the auditor remain throughout?

Answer 8

Alert throughout the audit for evidence of events or conditions that may cast significant doubt on entity’s ability to continue as a going concern