Wiley Practitioner's Guide to GAAS 2020

24AU-C 570 The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern

Scope

Definition of Term

Objectives of AU-C Section 570

Responsibility for the Evaluation of the Entity’s Ability to Continue as a Going Concern

Management’s Responsibility

Auditor’s Responsibility

Requirements

Specific Audit Procedures

Indications of Going Concern Problems

Consideration of Management’s Evaluation and the Auditor’s Evaluation

Additional Procedures When Events or Conditions Are Identified

Written Representations

Auditor Conclusion—Substantial Doubt Exists

Auditor Conclusion—Substantial Doubt Has Been Alleviated

Effects on the Auditor’s Report

Communication with Those Charged with Governance

Eliminating a Going Concern Emphasis-of-Matter Paragraph from a Reissued Report

Significant Delay in the Issuance of Financial Statements

Documentation Requirements

AU-C 570 Illustration—Going Concern Checklist

SCOPE

NOTE: AU-C 570 applies in the audit of any type of entity. It is applicable to both profit-making and not-for-profit organizations. Thus, it would apply, for example, in the audit of a municipality. Also, the Section applies to financial statements prepared using a general-purpose or special-purpose framework. However, it does not apply to liquidation-basis financial statements. (AU-C 570.01)

The table below summarizes the scope of AU-C 570 under various circumstances.

Circumstance	Auditor Responsibilities
Complete set of financial statements	AU-C 570 applies ...