Mgt is required to assess IT even FRF doesn't require

it involves making a judgement,at a particular

RESPONSIBILITY FOR ASSESMENT time,
about future outcomes of Events or conditions
OF THE ENTITY'S ABILITY TO
CONTINUE AS A GC degree of uncertainty associated with OEC
OCE : outcome of events or condition
IAW : In accordance with size and complexity of entity, nature and condition degree to which it is affected by external
Factors relevant for judgement about FOEC
FOCE : future outcome of E\C of buis. And influences

Info. made available at the time of judgement made

AUDITOR'S respo is to obtain SAAE about Apt. of mgt use of GC ass.

That may cast sig. doubt about entity's ability

He shall consider whether there is Material uncertainty asso with OCE
to continue as GC
RESPONSIBLITIES OF THE AUDITOR
Report IAW this SA

can't be viewed as a guarantee as to Entity's

As per SA 200 Absence of any reference to GC uncertainty in AR
ability to continue as GC

Auditor remain alert from whether E/C that may cast .....

whether mgt already performed preliminary

Consider events and condition
assesment of Entity's ability to cont as GC

in doing so he shall determine If done : Discuss with Mgt

If not done : Discuss mgt the basis of GC ass'n.

and consider all relevant info included in the

he shall evaluate mgt assesemnt of entity's ability......
assesment
Evaluating Mgt Assesments
If mgt assesment regarding it is less than 12 months Auditor request mgt to extend at least 12
from DOFS months from that date

Any E/C that may caste significant doubt on

RAP and related ACTIVITIES Period beyond Mgt assesment Auditor enquire, from mgt, as to its knowledge
entity's...

Request to make assesment, if not yet made

SA 570 GC Evaluate mgt plan for future actions in rel to GC

AAP when E/C are identified when Entity prepared CFS check reliability and underlying assumption

Considering whether any additional facts or info

since date on which assessment by mgt
have become available

Requesting WR from Mgt/ TCWG regarding regarding future -plans or actions

Examples refer 7.5

He shall evaluate whether SAAE obtained, and shall

conclude on ,
Appr. of mgt use of GC assumption
appropriateness of mgt's use of the GC basis for FS

In this case auditor based on AE obtained and A's conclude whether Unc. exists related to E/C
Auditor conclusions Existence of material uncertainty
judgement that may cast...

it exists when Magnitude of potential impact and appro dislosure of nature and implications of
Material Unc
likelihood of occurence in A's judgement Unc. is necessary as per AFRF

Use of GC basis of accounting is inappro. Express Adverse opinion

Express unmodified opinion

Use of GC is appro but Mat Unc exists
AND disclosure made for it include separate section under the heading " MU
related to GC ".

these E/C indicate that MU exists that may

To draw attention to the note in FS that cast.. and
discloses the matter AND State that
Auditor's opinion is not modified

Express Qualified or Adverse opinion And

Use of GC is appro but Mat Unc exists
AND disclosure NOT made for it State that A MU exists taht may cast..
IMPLICATION OF AUDTITOR'S In the basis for Qualified \ Adverse opinion section
REPORT and FS do not Adequately disclose that matter

Adequacy of disclosure when E/C identified

but NO MU and MU exists

Evaluate the FS provide adequte disclosure he shall determine whether FS adequately

about these E/C disclose

as per AFRF principal E&C Mgt's plan to deal

with these E/C

he shall consider the implication for AR

Mgt unwilling to make or extend its assesment
a qualified or adverse opinion may be appropriate,
regaridng use of GC basis for prep FS
because he is unable to obtain SAAE