Give five examples of operating events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to…

CA Intermediate · Auditing and Ethics · PYQS · May 2025
Give five examples of operating events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern. (5 Marks)

Suggested Answer and Working Notes:

As per SA 570, “Going Concern", the following are examples of operating events or conditions that, individually or collectively, may cast significant doubt on the entity's ability to continue as a going concern. Management intentions to liquidate the entity or to cease operations.Loss of key management without replacement.Loss of a major market, key customer(s), franchise, license, or principal supplier(s).Labour difficulties.Shortages of important supplies.Emergence of a highly successful competitor.

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