Document ID: chunk:federal_register_of_legislation:F2023C00340:reg:10:p4
Version: federal_register_of_legislation:F2023C00340
Segment Type: reg
Provision Reference: reg 10 (pt 4/29)
Character Range: 15326–18426

use of the going concern basis of accounting in the preparation of the financial report, and to conclude, based on the audit evidence obtained, whether a material uncertainty exists about the entity's ability to continue as a going concern.  These responsibilities exist even if the financial reporting framework used in the preparation of the financial report does not include an explicit requirement for management to make a specific assessment of the entity's ability to continue as a going concern.

    7.                   However, as described in ASA 200,[2] the potential effects of inherent limitations on the auditor's ability to detect material misstatements are greater for future events or conditions that may cause an entity to cease to continue as a going concern.  The auditor cannot predict such future events or conditions.  Accordingly, the absence of any reference to a material uncertainty about the entity's ability to continue as a going concern in an auditor's report cannot be viewed as a guarantee as to the entity's ability to continue as a going concern.

Effective Date

    8.                   [Deleted by the AUASB.  Refer Aus 0.3]

Objectives

    9.                   The objectives of the auditor are:

         (a)                To obtain sufficient appropriate audit evidence regarding, and conclude on, the appropriateness of management's use of the going concern basis of accounting in the preparation of the financial report;

         (b)                To conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the entity's ability to continue as a going concern; and

         (c)                To report in accordance with this Auditing Standard.

Requirements

Risk Assessment Procedures and Related Activities

    10.               When performing risk assessment procedures as required by ASA 315[3] the auditor shall consider whether events or conditions exist that may cast significant doubt on the entity's ability to continue as a going concern.  In so doing, the auditor shall determine whether management has already performed a preliminary assessment of the entity's ability to continue as a going concern, and: (Ref: Para. A3–A6)

         (a)                If such an assessment has been performed, the auditor shall discuss the assessment with management and determine whether management has identified events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern and, if so, management's plans to address them; or

         (b)                If such an assessment has not yet been performed, the auditor shall discuss with management the basis for the intended use of the going concern basis of accounting, and enquire of management whether events or conditions exist that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern.

    11.               The auditor shall remain alert throughout the audit