ISA 570 (Revised) – Going Concern
Auditor Responsibilities, Management Assessment, and Reporting Under Going Concern
About This Course
Course Information
The concept of Going Concern lies at the heart of every audit. It reflects whether an entity can continue its operations for the foreseeable future without the intention or necessity of liquidation. ISA 570 (Revised) sets out the auditor’s responsibilities in assessing and reporting on this fundamental assumption. This refresher course is designed for auditors and accounting professionals who want to strengthen their understanding of ISA 570 and stay current with its practical application. Through a mix of reading and video modules, you’ll revisit key concepts, explore management’s and the auditor’s responsibilities, learn how to evaluate Going Concern assessments, and understand the implications for audit reporting. You’ll also study cases, communication examples, and recent challenges that have affected Going Concern judgments, such as economic uncertainty and industry disruptions.
Course Sections
This is a 2 unit CPD course that is made up of following contents:
- Introduction to ISA 570 (Revised) – Overview and Objectives (video)
- Responsibilities of Management and the Auditor (interactive contents)
- Evaluating Management’s Assessment (video)
- Audit Procedures and Evidence (interactive contents)
- Reporting Implications under ISA 570 (video)
- Communicating with Those Charged with Governance (interactive contents)
- Common Pitfalls and Practical Scenarios (video)
- Emerging Issues and Best Practices (video)
- Summary and Key Takeaways (interactive contents)
- Quizzes
- Additional readings
What You Will Learn
- Explain the purpose and scope of ISA 570 (Revised) and how it differs from earlier versions of the standard
- Evaluate management's going concern assessment, including cash flow forecasts, budgets, and the minimum twelve-month assessment period
- Identify red flags that indicate potential going concern issues, such as persistent operating losses, covenant breaches, and loss of major customers
- Distinguish between an unmodified opinion, a material uncertainty paragraph, and a modified opinion based on the adequacy of management's going concern disclosures
- Apply stress testing and sensitivity analysis to challenge management's assumptions under adverse conditions
- Recognise common audit pitfalls, including overreliance on management's optimistic assumptions and insufficient documentation of going concern conclusions
- Assess the impact of economic uncertainty, inflation, and geopolitical events on going concern judgments and audit procedures
Who This Course Is For
- External auditors who assess going concern as part of financial statement audits
- Audit managers and senior staff responsible for reviewing and documenting going concern conclusions
- Internal auditors who need to understand how ISA 570 affects financial reporting and disclosure requirements
- Accounting professionals preparing or reviewing management's going concern assessments
Prerequisites
- A working understanding of financial statement auditing and the audit report structure under ISA 700
- Familiarity with basic auditing standards, particularly those relating to risk assessment and audit evidence
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