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IAASB: New FAQ on Going Concern
- 21 May 2025
- Auditing and Assurance
- South African Accounting Academy
Summary:
The International Auditing and Assurance Standards Board (IAASB) has published a new Frequently Asked Questions (FAQ) document to support stakeholders as they implement International Standard on Auditing 570 (Revised 2024), Going Concern.
Article:
The FAQ document contains 8 questions, addressing key questions on the enhanced auditor reporting model for going concern that is included in the revised standard. Specifically, it focuses on the implications for the auditor’s report when reporting entity specific going concern matters in a section titled ‘Going Concern’ or ‘Material Uncertainty Related to Going Concern.’
It also provides an illustrative example of an auditor’s report that provides a description of how the auditor evaluated management’s assessment of going concern.
Published in April, ISA 570 (Revised 2024) introduced several key changes to strengthen the auditor’s work in evaluating management’s assessment of going concern. These include:
- More robust risk assessment procedures that support auditors in determining, on a timely basis, whether events or conditions have been identified that may cast significant doubt on the entity’s ability to continue as a going concern.
- Enhanced evaluation of management’s assessment of going concern, including the significant judgments on which such evaluation is based.
- Required evaluation of management’s assessment of going concern that covers a period of at least twelve months from the date of approval of the financial statements.
- Reinforced communications and increased transparency in reporting going concern matters.
This FAQ does not amend or override ISA 570 (Revised 2024); the text of the standard remains authoritative. The FAQ is not exhaustive and is intended to complement the standard, which takes effect on or after December 15, 2026.
Click here to download the document:
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.
- As an auditor and independent reviewer, you should be aware of new standards and publications (like guidance and support materials) issued by the standard-setting bodies, e.g. the IAASB.