What is going concern qualification?

What is going concern qualification?

Going Concern Qualification means, with respect to any financial statements, any note or similar qualification from the Company’s auditors that the Company may not have sufficient funds or generate sufficient revenue to satisfy its obligations as they come due.

How does an auditor assess going concern?

Further procedures that the auditor may perform to conclude whether a material going concern uncertainty exists include: Analysing and discussing the entity’s latest available interim financial statements. Reading the terms of debentures and loan agreements and determining whether any have been breached.

What is a going concern statement?

The going concern concept is an accounting concept underlying financial reporting. Under the going concern concept it is assumed that the company will continue for the foreseeable future and it is not the intention to, nor is there the need to, liquidate the company or cease trading.

Which of the following statements regarding the going concern concept is true?

The correct answer is B. The going concern concept assumes that the business will continue for the foreseeable future.

What should a going concern assessment include?

The assessment of going concern is made at the date that the directors approve the annual or half-yearly financial statements, and takes into account the relevant facts and circumstances at that date.

How does going concern affect financial statements?

The concept of going concern is an underlying assumption in the preparation of financial statements, hence it is assumed that the entity has neither the intention, nor the need, to liquidate or curtail materially the scale of its operations.

What information can be found on the statement of financial position?

The statement of financial position is another term for the balance sheet. The statement lists the assets, liabilities, and equity of an organization as of the report date. As such, it provides a snapshot of the financial condition of a business as of a specific date.