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ISCA has provided comments on IAASB’s Exposure Draft on Proposed ISA 570 (Revised 202X) Going Concern and Proposed Conforming and Consequential Amendments to Other ISAs.
ISCA is supportive of the enhancements to strengthen the auditor’s evaluation of management’s going concern in response to the heightened risks surrounding this topic in recent years. However, new and enhanced requirements need to be balanced vis-à-vis the responsibilities borne by management and directors.
We highlighted practical challenges that may be faced by practitioners arising from the change in commencement date of the twelve-month period of management’s assessment, which is not aligned to IAS 1 Presentation of Financial Statements. We also find that the new requirement to design and perform audit procedures to evaluate management assessment in all circumstances might be excessive, particularly in audits of entities with lower risk of going concern.
We also shared concerns heard on the proposed inclusion of explicit statements on going concern in the auditor’s report. Instead of such statements, we proposed enhancing the level of disclosures on gong concern to better going concern matters to users of financial statements.
Click here to read our detailed comments.
Click here for the IAASB’s Exposure Draft.