SA 570 Chart 1

Responsibilities of Management Responsibilities of the auditor Important Point

to assess the entity's ability to Appropriateness Material uncertainty Absence of Reference to GC

continue as a going concern Uncertainty

obtain sufficient appropriate MU

audit evidence about the cannot be viewed as a
appropriateness of guarantee as to the entity's
management's use of the going ability to continue as a going
concern assumption. concern
in relation to

Conditions and Events

That may cast significant

Doubt on Entity’s ability to

continue as a GC
 SA 570 Chart 2

RAP Indicators

"
Events and Conditions Preliminary assessment by Mgt Remain Alert Financial Indicators Operating Indicators Other Also check for mitigation

Whether there are events or Determine For events and conditions Negative उधार Loss Labour unrest strikes etc Legal Proceedings Change in Govt Policy Non-Compliance with Statutory
conditions requirements

Whether Mgt. has already Net worth Cash flow Losses Dividend Adverse Financial Ratio B3 C3 Key management Major market or supplier Major license
That may cast performed

Borrowing No payment on due date Arrangement Credit to cash

SD - EA - To Continue as GC a preliminary assessment of

Renewal /Repayment Short term for Long Term Non-Compliance

EA to Continue as GC
 SA 570 Chart 3

Additional Audit Procedures -

When events or conditions are
identified

Request Management Future Plans cash flow forecast, consider its Additional facts and Written representation from
reliability. information Mgt or TCWG

To make it’s assessment of Evaluate

available regarding

EA TC GC
since the date on which Their plans for future action feasibility of these plans
management made it’s
assessment
 SA 570 Chart 4

Auditor’s Conclusion

Evaluate Based on Audit Evidence

SAAE obtained? regarding Conclude on Auditor shall conclude

Whether in auditor’s
professional judgement

MU वाली लाइन What is MU

the appropriateness of
management’s use of the
going concern basis of
accounting in the Magnitude of it’s potential likelihood of occurrence is such that
impact
preparation of the
financial statements.

In auditor’s judgement

appropriate disclosure of the

nature and implications of the
uncertainty is necessary
 SA 570 Chart 5

Implications for the A’s Report

Use of GCA is Inappropriate Use of GCA is Appropriate

Adverse opinion But MU Exist

Adequate Disclosure of a Adequate Disclosure of a

Material Uncertainty Is Made Material Uncertainty Is Not
in the Financial Statements Made in the Financial
Statements

Unmodified Opinion A’s Report - Separate Section

Qualified /Adverse opinion In the Basis for Qualified
(Adverse) Opinion section of
the auditor’s report, state that

MU relating to GC

a material and that the financial statements do

uncertainty exists that may not adequately disclose this
Draw attention to the note in State that
cast significant doubt on the matter.
the financial statements that
entity’s ability to continue as a
discloses the matters.
going concern

these events or conditions and the auditor’s opinion is not

indicate that a material modified
uncertainty exists that may in respect of the matter.
cast significant
doubt on the entity’s ability to
continue as a going concern