In this edition, John Selwood focuses on some unusual questions from the faculty’s spring roadshow, taking in the early and the end stages of a business
The first question focuses on the unusual situation of auditing a company that is not in financial distress but intends to cease trading as a solvent liquidation. The second question deals with concerns around safeguards to independence from a lone audit partner (which may not be unusual) in a young practice doing audit (something a little more unusual).
Question: In the May edition of the Audit clinic, you answered a question related to going concern when a company was in financial distress. I am auditing a company that is not in financial distress and intends to cease trading as a solvent liquidation in the near future. Should the financial statements be prepared on a going concern basis? What are the implications for the audit?
Answer: This is a more unusual audit situation than dealing with a company in financial distress, and In this edition, John Selwood focuses on some unusual questions from the faculty’s spring roadshow, taking in the early and the end stages of a business auditors sometimes do not know what to do. Changes to audit reporting in the new International Standards on Auditing (ISAs) also make this area more difficult.
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