Auditor's Procedures - Going Concern
In forming a thought on the going to relate position of a company, the auditors have to:
a) Examine the company, its plans for the future, its background, review of cash flows and the financing plans;
b) At every level of the audit research for and evaluate evidence for and against the going to relate applicability;
c) Whether he is in doubt, and the directors have formulated plans for the continuation of the company, he has to evaluate these plans, ensuring about:
- All parts of the plan are consistent along with each other;
- Whether the plans are contingent on the response of third parties then he has to seek third parties written verifications;
- Ascertain such the plans are particular rather than common;
- Review the supporting evidence for the plans whether available for reasonableness;
- Seriously consider several professional advices obtained through the directors;
- Consider any potential support from other group companies through looking at any contractual obligations, director's intentions and the capability of the assembly company to provide the support.
d) Consider where he has enough evidence to form a thought on the applicability of the going to relate assumption.