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.
Topics: Completion and Review
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