Rachel Lockwood
- Position: Partner OCA
- Phone: +44 (0) 1753 551111
- Fax: +44 (0) 1753 550544
- Email: Rachel.Lockwood@ouryclark.com
Auditors are under pressure in the current climate to ensure businesses really are a going concern… and not just this year! Auditors MUST consider any known future events which may cast doubt on the going concern assumption and obtain evidence to satisfy themselves such that any events are not a major going concern risk.
Things to consider include:
- if bank financing is due for renewal evidence can be seen as a positive response from a bank or alternative investor;
- if the plan is to sell a business to repay finance in an active market within a range sufficient to discharge liabilities is evident;
- the forecasts that are available are realistic and show the business being able to meet its liabilities as they fall due.
All of these going concern considerations link to a director’s duty relating to wrongful trading and ensuring they have taken appropriate action to protect creditors so it really is in everyone’s interest.
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Tags: Audit
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