IAASB: ISA 570 (Revised 2024) Going Concern

IAASB: ISA 570 (Revised 2024) Going Concern

• 23 April 2025
• Auditing and Assurance
• South African Accounting Academy

Summary:

The International Auditing and Assurance Standards Board (IAASB) has released its revised International Standard on Auditing 570 (Revised 2024), Going Concern.

Article:

Approved earlier this year, this revised standard responds to corporate failures that raised questions regarding auditors’ responsibilities by significantly enhancing the auditor’s work in evaluating management’s assessment of an entity’s ability to continue as a going concern. The revised standard will also increase consistency in auditing practices and strengthen transparency through communications and auditor reporting on matters related to going concern in a consistent manner.

ISA 570 (Revised 2024) introduces several key changes:

• Robust risk assessment. Auditors must conduct, in a more timely manner, thorough risk assessments to determine whether events or conditions are identified that may cast significant doubt on the entity’s ability to continue as a going concern.
• Evaluating Management’s Assessment. Auditors must evaluate management’s assessment of going concern irrespective of whether events or conditions are identified. In doing so, auditors must consider the potential for management bias and evaluate the underlying method, significant assumptions, and data used when management formed its assessment. Additionally, auditors must evaluate whether management’s judgements and decisions indicate potential bias.
• Extended date of evaluation period. The auditor’s evaluation period for going concern now extends at least twelve months from the date of approval of the financial statements, contributing to an assessment of more relevant, decision-useful information.
• Enhanced transparency. The standard requires clearer communication in the auditor’s report about the auditor’s responsibilities and work related to going concern and strengthened communications with those charged with governance and external parties.

Revised ISA 570 addresses calls from investors, regulators, and other stakeholders for more robust audit procedures related to going concern. It provides decision-useful, entity-specific information in the auditor’s report regarding the auditor’s work and responsibilities for going concern. The changes in the standard further advance high-quality audits and help narrow the expectation gap, thereby supporting users’ interests and broader financial stability.

The revised standard is effective for audits of financial statements for periods beginning on or after 15 December 2026.

Access the Basis for Conclusions (43 pages) at https://ifacweb.blob.core.windows.net/publicfiles/2025-04/IAASB-ISA-570-Going-Concern-Basis-Conclusions.pdf

Click here to download the 139-page Revised standard:

https://ifacweb.blob.core.windows.net/publicfiles/2025-04/IAASB-ISA-570-Going-Concern-Revised.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• As an auditor and independent reviewer, you need to comply with International Standards on Auditing and other Assurance Services, and thus you need knowledge of newly revised standards that are approved as well as when they become effective.
• Failure to adhere to ISAs may be interpreted as negligence and you could be held liable.
• Auditors, Independent Reviewers and Accountants should be aware of the latest standards that have been approved by standard-setting boards like the IAASB, when these are published, and when these standards become effective in South Africa.

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