Going concern

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. Financial statements should be prepared on a going concern basis unless -

  2. The going concern assumption is applicable for the financial statements of companies -

  3. If the directors of a company adopting the FRSSE or UK GAAP consider a period of less than one year from the approval of the financial statements for the purpose of the going concern assessment the consequences would be -

  4. If the directors of a company adopting IFRS consider a period of 12 months from the end of the reporting period for their going concern assessment, the consequences would be -

  5. Which of the following conclusions cannot not be appropriate as a result of the directors' assessment of going concern -

  6. When the auditor is evaluating the management's assessment of going concern for a small entity that has not prepared detailed budgets and cashflow forecasts, it should -

  7. If the auditor has concluded that a material uncertainty exists but the use of the going concern is appropriate and the accounts adequately disclose the nature and implications of the uncertainty and the management's plans to deal with it, the auditor shall -

  8. If the auditor has concluded that a material uncertainty exists and that the use of the going concern is nevertheless appropriate but the accounts do not include adequate disclosures about the uncertainty and the management's plans to deal with it, the auditor shall -

  9. Which International Auditing Standard (ISA) deals with the auditing of the use of the going concern in the financial statements -

  10. When the management's assessment of going concern includes the assumption of continued financial support by third parties that is important to the ability to continue as a going concern, the auditor should -