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QUESTION 1 (25 Marks)
1.1. Briefly explain why auditors are interested in the going concern ability of a company? (6 marks)
1.2 Where a company is required to disclose a going concern problem in its notes, what information should
the note contain?
(3 marks)
1.3. In terms of ISA 570 (Revised) - Going Concern, the adoption of the going concern basis of accounting in
the preparation of the annual financial statements means ...?
(3 marks)
1.4. If a material uncertainty exists relating to the company’s ability to continue as a going concern, can the
going concern basis for the preparation of the Annual Financial Statements be adopted? Explain.
(3 marks)
1.5. Is going concern an assertion? Discuss. (2 marks)
1.6. What are the objectives of the auditor when conducting audit procedures relating to the going concern
assumption?
(4 marks)
1.7. If management (the directors) have already performed an assessment of their company’s going concern
ability, is it necessary for the auditor to perform an assessment of going concern? Justify.
(4 marks)
Sagot :
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