Document ID: chunk:federal_register_of_legislation:F2023C00340:reg:10:p6
Version: federal_register_of_legislation:F2023C00340
Segment Type: reg
Provision Reference: reg 10 (pt 6/29)
Character Range: 20920–24265

including consideration of mitigating factors.  These procedures shall include: (Ref: Para. A16)

         (a)                Where management has not yet performed an assessment of the entity's ability to continue as a going concern, requesting management to make its assessment.

         (b)                Evaluating management's plans for future actions in relation to its going concern assessment, whether the outcome of these plans is likely to improve the situation and whether management's plans are feasible in the circumstances.  (Ref: Para. A17)

         (c)                Where the entity has prepared a cash flow forecast, and analysis of the forecast is a significant factor in considering the future outcome of events or conditions in the evaluation of management's plans for future actions: (Ref: Para. A18–A19)

             (i)                 Evaluating the reliability of the underlying data generated to prepare the forecast; and

             (ii)               Determining whether there is adequate support for the assumptions underlying the forecast.

         (d)                Considering whether any additional facts or information have become available since the date on which management made its assessment.

         (e)                Requesting written representations from management and, where appropriate, those charged with governance, regarding their plans for future actions and the feasibility of these plans.  (Ref: Para. A20)

Auditor Conclusions

    17.               The auditor shall evaluate whether sufficient appropriate audit evidence has been obtained regarding, and shall conclude on, the appropriateness of management's use of the going concern basis of accounting in the preparation of the financial report.

    18.               Based on the audit evidence obtained, the auditor shall conclude whether, in the auditor's judgement, a material uncertainty exists related to events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern.  A material uncertainty exists when the magnitude of its potential impact and likelihood of occurrence is such that, in the auditor's judgement, appropriate disclosure of the nature and implications of the uncertainty is necessary for: (Ref: Para. A21A22)

         (a)                In the case of a fair presentation financial reporting framework, the fair presentation of the financial report, or

         (b)                In the case of a compliance framework, the financial report not to be misleading.

Adequacy of Disclosures When Events or Conditions Have Been Identified and a Material Uncertainty Exists

    19.               If the auditor concludes that management's use of the going concern basis of accounting is appropriate in the circumstances but a material uncertainty exists, the auditor shall determine whether the financial report: (Ref: Para. A22‒A23)

         (a)                Adequately discloses the principal events or conditions that may cast significant doubt on the entity's ability to continue as a going concern and management's plans to deal with these events or conditions; and

         (b)                Discloses clearly that there is a material uncertainty related to events or conditions that may cast significant doubt on the