Document ID: chunk:federal_register_of_legislation:F2023C00340:reg:10:p14
Version: federal_register_of_legislation:F2023C00340
Segment Type: reg
Provision Reference: reg 10 (pt 14/29)
Character Range: 43998–47194

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 Australian Accounting Standard AASB 101 in discussing the uncertainties related to events or conditions which may cast significant doubt on the entity's ability to continue as a going concern that should be disclosed in the financial report.  In some other financial reporting frameworks, the phrase "significant uncertainty" is used in similar circumstances.

         Aus A21.1 Refer to [Aus] Appendix 1 for a diagrammatic illustration of the links between going concern considerations and the types of audit opinions.

Adequacy of Disclosure when Events or Conditions Have Been Identified and a Material Uncertainty Exists (Ref: Para. 18‒19)

    A22.         Paragraph 18 explains that a material uncertainty exists when the magnitude of the potential impact of the events or conditions and the likelihood of occurrence is such that appropriate disclosure is necessary to achieve fair presentation (for fair presentation frameworks) or for the financial report not to be misleading (for compliance frameworks).  The auditor is required by paragraph 18 to conclude whether such a material uncertainty exists regardless of whether or how the applicable financial reporting framework defines a material uncertainty.

    A23.         Paragraph 19 requires the auditor to determine whether the financial statement disclosures address the matters set forth in that paragraph.  This determination is in addition to the auditor determining whether disclosures about a material uncertainty, required by the applicable financial reporting framework, are adequate.  Disclosures required by some financial reporting frameworks that are in addition to matters set forth in paragraph 19 may include disclosures about:

           * Management's evaluation of the significance of the events or conditions relating to the entity's ability to meet its obligations; or

           * Significant judgements made by management as part of its assessment of the entity's ability to continue as a going concern.

    Some financial reporting frameworks may provide additional guidance regarding management's consideration of disclosures about the magnitude of the potential impact of the principal events or conditions, and the likelihood and timing of their occurrence.

Adequacy of Disclosures When Events or Conditions Have Been Identified but No Material Uncertainty Exists (Ref: Para. 20)

    A24.         Even when no material uncertainty exists, paragraph 20 requires the auditor to evaluate whether, in view of the requirements of the applicable financial reporting framework, the financial report provides adequate disclosure about events or conditions that may cast significant doubt on the entity's ability to continue as a going concern.  Some financial reporting frameworks may address disclosures about:

           * Principal events or conditions;

           * Management's evaluation of the significance of those events