Going concern

At Risk Assessment and Planning Stage of Audit what is being performed by auditor for going concern assessment

• Consider event or condition that may cast significant doubt on the entity's going concern
• Evaluate Managements assessment
• Both Option 1 and 2
• None of the above

If the preliminary assessment is not performed by management what is the course of action that auditor should perform

• Discuss with management the basis for the intended use of the going concern basis of accounting
• Inquire of management whether events or conditions exist that may cast significant doubt on entity’s ability to continue as a going concern.
• Both Option 1 and 2
• Determine whether management identified events or conditions that may cast significant doubt on entity’s ability to continue as a going concern and, if so, management’s plans to address them.

How much period should the management assessment of going concern assessment should cover

• 12 months from the date of financial statement
• 12 months from the date of previous Audit Report
• 6 months from the date of financial statement
• 6 months from the date of Audit Report

Which of the following is not an example of Financial indicator of going concern risk

• Adverse Key financial ratio
• Changes in laws, regulation impacting the entity
• Arrears or discontinuance of dividend
• inability to pay creditors on due date

Beyond the period assessed by management, there is no responsibility to perform audit procedures, other than inquiry of management, to identify events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern

• True
• False

At respond to risk stage for going concern assessment, the auditor should check

• Appropriateness of going concern basis of accounting
• Existence of material uncertainities
• Adequacy of disclosures
• All of the above

If event or condition have been identified that may cast significant doubt on going concern then what additional procedure should be performed

• Evaluate Management plans for future action
• consider whether any additional facts or information have become available since initial assesment of management
• Requesting written representation from Management & TCWG
• All of the above

which is not an appropriate example of management plan for future action to mitigate going concern risk

• Borrow money or restructure debt
• Decrease Capital
• Increase Revenue
• Reduce expenditure

In the event the entity is in liquidation what basis of accounting should be used for preparing the management accounts

• Cash Basis
• Accrual Basis
• Both

If use of going concern basis of accounting is inappropriate then what opion will be formed

• Disclaimer of opinion
• Adverse Opinion
• unqualified opininon
• qualified opinion