Economic uncertainties in recent years have brought the topic of going concern to the forefront and led to demands for enhanced transparency on going concern. Conditions such as war and the global pandemic have also heightened risks, focusing attention on the challenges and issues pertaining to the auditor’s responsibilities and work related to management’s assessment of an entity’s ability to continue as a going concern, and the reporting thereof. Ongoing economic uncertainties and the recent turmoil in the financial sector have put a spotlight on the topic of going concern, further emphasizing the need for a more robust audit standard on going concern.
The IAASB has now issued an Exposure Draft of International Standard on Auditing (ISA) 570 (Revised 202X), Going Concern, and the related conforming and consequential amendments. In addition, the IAASB’s Exposure Draft also includes an Explanatory Memorandum, which provides background to, and an explanation for, the proposed revisions to extant ISA 570 (Revised).
The AASB plans, subject to comments received following exposure, to adopt proposed ISA 570 (Revised 202X) and the proposed conforming and consequential amendments to other ISAs. The result would be revised respective Canadian Auditing Standards (CASs).
In light of the current landscape, input from interested and affected parties is crucial to ensure that proposed CAS 570 remains fit for purpose in the current and future macroeconomic and geopolitical environments.
The IAASB’s Exposure Draft, “Proposed International Standard on Auditing 570 (Revised 202X) Going Concern and Proposed Conforming and Consequential Amendments to Other ISAs,” is available on the IAASB website.
In addition to the text of proposed ISA 570 (Revised 202X), the IAASB’s Exposure Draft includes the Explanatory Memorandum, which provides background to, and an explanation for, the proposed revisions to extant ISA 570 (Revised).