Page 177 - Microsoft Word - 00 IWB ACCA F7.docx

Completion and review

2.2 Responsibilities for going concern

Directors Auditors

Assess the company’s ability to continue Evaluate the appropriateness of
as a going concern management’s use of the going concern
assumption

Prepare forecasts to help with this Conclude whether a material uncertainty
assessment exists and if so, assess the adequacy of
the client’s disclosure

Disclose any material uncertainties Report in accordance with ISA 570 Going
relating to going concern in the financial Concern
statements

2.3 Indicators of going concern problems

 Net current liabilities

 Negative cash flow

 Borrowing facilities not agreed or close to expiry of current agreement

 Inability to obtain credit from suppliers

 Sale of non-current assets to fund operating costs

 Loss of key staff

 Over-reliance on small number of customers or products

 Increasing competition

173