Document ID: chunk:federal_register_of_legislation:F2023C00340:reg:10:p13
Version: federal_register_of_legislation:F2023C00340
Segment Type: reg
Provision Reference: reg 10 (pt 13/29)
Character Range: 40966–44273

that are relevant to the requirement in paragraph 16 may include the following:

           * Analysing and discussing cash flow, profit and other relevant forecasts with management.

           * Analysing and discussing the entity's latest available interim financial report.

           * Reading the terms of debentures and loan agreements and determining whether any have been breached.

           * Reading minutes of the meetings of shareholders, those charged with governance and relevant committees for reference to financing difficulties.

           * Enquiring of the entity's legal counsel regarding the existence of litigation and claims and the reasonableness of management's assessments of their outcome and the estimate of their financial implications.

           * Confirming the existence, legality and enforceability of arrangements to provide or maintain financial support with related and third parties and assessing the financial ability of such parties to provide additional funds.

           * Evaluating the entity's plans to deal with unfilled customer orders.

           * Performing audit procedures regarding subsequent events to identify those that either mitigate or otherwise affect the entity's ability to continue as a going concern.

           * Confirming the existence, terms and adequacy of borrowing facilities.

           * Obtaining and reviewing reports of regulatory actions.

           * Determining the adequacy of support for any planned disposals of assets.

Evaluating Management's Plans for Future Actions (Ref: Para. 16(b))

    A17.         Evaluating management's plans for future actions may include enquiries of management as to its plans for future action, including, for example, its plans to liquidate assets, borrow money or restructure debt, reduce or delay expenditures, or increase capital.

The Period of Management's Assessment (Ref: Para. 16(c))

    A18.         In addition to the procedures required in paragraph 16(c), the auditor may compare:

           * The prospective financial information for recent prior periods with historical results; and

           * The prospective financial information for the current period with results achieved to date.

    A19.         Where management's assumptions include continued support by third parties, whether through the subordination of loans, commitments to maintain or provide additional funding, or guarantees, and such support is important to an entity's ability to continue as a going concern, the auditor may need to consider requesting written confirmation (including of terms and conditions) from those third parties and to obtain evidence of their ability to provide such support.

Written Representations (Ref: Para. 16(e))

    A20.         The auditor may consider it appropriate to obtain specific written representations beyond those required in paragraph 16 in support of audit evidence obtained regarding management's plans for future actions in relation to its going concern assessment and the feasibility of those plans.

Auditor Conclusions

Material Uncertainty Related to Events or Conditions that May Cast Significant Doubt on the Entity's Ability to Continue as a Going Concern (Ref: Para. 18‒19)

    A21.         The phrase "material uncertainty" is used in