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ACCA gives cautious welcome to ‘Going Concern’ guidance
New guidance to company directors and auditors to help them judge whether a business can continue to operate as a going concern have been given a cautious welcome by ACCA (the Association of Chartered Certified Accountants).
The guidance, issued this week by the UK’s Auditing Practices Board (APB) as a bulletin entitled Going concern issues during the current economic conditions, is designed to clarify the position for company directors who must evaluate whether their business will still be a going concern in the following year, and for auditors who must judge whether that evaluation is reasonable.
Sara Harvey, Chairman of ACCA’s Audit Committee, said: “Any further advice which helps to give company directors and auditors greater clarity on how they should address the issue of going concern is to be welcome if it results in both groups looking at the issue through the same eyes as they make this important judgement.”
“ The issue of whether an organisation can be seen as a 'going concern' is highly sensitive and significant to shareholders, potential investors and other stakeholders who are becoming more risk averse in the current economic climate. With US regulators already advising auditors there to be more sceptical about the going concern issue, and the potential implications that could have, it is clearly important to have certainty for both sides when they come to making or judging the same issue in the UK,” said Sara Harvey.
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Notes to Editors
1. ACCA is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 325,000 students and 122,000 members in 170 countries worldwide.
2. ACCA has worked with governments, national organisations and development agencies in emerging economies- for over 20 years- promoting the accounting profession, to create value for the communities, businesses and individuals it serves.
3. ACCA believes that globalisation of business means that one set of reporting standards is essential. We favour the principles-based IFRS.
4. ACCA understands the real issues facing small businesses as 63,000 of our members work in SMEs or small partnerships worldwide.
For further information please contact:
Colin Davis Head of International Communications ACCA tel: + 44 (0) 207 059 5738 colin.davis@accaglobal.com