Section Evaluating Management’s Plans for Future - Auditing Standard ASA 570 Going Concern - Evaluating Management’s Plans for Future Actions

Evaluating Management’s Plans for FutureEvaluating Management’s Plans for Future Actions

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If events or conditions have been identified that may cast significant doubt on the entity’s ability to continue as a going concern, the auditor shall evaluate management’s plans for future actions in relation to its going concern assessment, including whether: (Ref: Para. A59–A62)
1. The outcome of these plans is likely to be sufficient to mitigate the effects of the identified events or conditions;
2. Management’s plans are feasible in the circumstances; and
3. Management has both the intent and ability to carry out specific courses of action.
If management’s plans for future actions include the use of significant assumptions or data, the auditor shall perform the audit procedures required by paragraph 19(b)-(c).

Financial Support by Third Parties or Related Parties, Including the Entity’s Owner-Manager

If management’s plans for future actions include financial support by third parties or related parties, including the entity’s owner-manager, the auditor shall obtain audit evidence about the intent and ability of those parties to maintain or provide the necessary financial support. (Ref: Para. A63–A65)