Download file to see previous pages...
In fact seasonal interruption are routine and regular and even after such interruptions business continue in normal course and thus entities pursuing seasonal business may be called going concern despite periodic seasonal interruption
In this write up the issues relating auditors’ responsibility to assess the substantial doubt arising out of normal auditing procedures is considered in order to produce independent and effective reporting to the stakeholders.
The assumption under the concept of going concern is continuity in normal course and such “continuity of entity operations is usually assumed in financial accounting in the absence to contrary” (Michael J Ramos, page 285)ii Auditors assess the going concern concept whenever substantial doubt is created while following regular and normal audit procedures.”If there are no doubt neither directors nor auditor need refer specifically to going concern in the financial statements or audit report. However, the Combines Code states that directors should report that the business is a going concern with supporting assumptions and qualifications as necessary. “(Lain Gray and Stuart Manson, page 674)iii
Going concern concept assumes an atmosphere of normalcy. Under the going concern concept “the enterprise will continue in operational existence for a foreseeable future.” (Nexia International, page 137)ivWhenever auditors have substantial doubts about the going concern concept it underlies that financial statements have not been prepared under normal circumstances. This is because “the going concern concept is unlikely to be compatible with the intention or necessity to enter into a scheme of rearrangement with the company’s creditors, or make an application for an administrative order, or place the company in administrative receivership or liquidation.”(Saleem Sheikh and William Rees, page 349)v In other words results or status shown by
...Download file to see next pagesRead More
Various driving factors and inherent benefits for different companies are proving to be incentives for the organisations towards enhanced financial globalisation. The growing interdependence of developed economies on developing and emerging economies is contributing towards increased globalisation (Hamilton & Quinlan, 2008, p.iv).
In this process, it may happen that the transactions might have occurred after balance sheet date but before the issuance of the financial statement. This affects the financial statements and therefore adjustments are made and properly mentioned in the statements.
In the above problem, Bob has breached the confidentiality principle; this is an ethical principle and legal obligation of discretion which require non disclosure of information except to the client and audit committee about the findings or any material uncovered during the course of audit.
It also includes profitability and protection of the company's assets. This exhibits that the internal control system should first of all meet the objective of accomplishing the company's operational goals and objectives. The second objective of an internal control system is to prepare a reliable and trustworthy financial reporting system.
al public and the accounting profession have had their differences over time on how the auditor should handle the process and what type of information should be reported by auditors to the users of the financial information. The difference between what the public and other
In other words, the procedures may be applied to compare financial information recorded and secured in past, to compare the actual results with initially developed forecasts and targets etc (Internet: allbusiness.com). Indeed, these
The managers present a financial report to the shareholders indicating the performance of the organization within a financial year or within a given period as the shareholders may require. Since the financial statement may
ppointment on the decision to dismiss the current audit firm and believes that since the audit firm was rendering its service for more than 15 years, everyone in the charity was very comfortable with the firm’s auditor. Besides, board members also revealed their concern about
Auditors then study the internal control system of the organization when they finish identifying risks: this system is made of procedures that help to prevent errors, protect assets, and guarantee compliance with
8 Pages(2000 words)Essay
GOT A TRICKY QUESTION? RECEIVE AN ANSWER FROM STUDENTS LIKE YOU!
Let us find you another Essay on topic Auditing for FREE!