'More rigour' necessary in considering analysis for going concern statements
Audit committees have been offered new guidance warning them to consider 'key questions' when looking at annual financial statements in the financial crisis.
The guidance, which reiterates existing requirements, says that 'particularly relevant in current economic conditions' is monitoring the integrity of the financial statements and formal statements about company performance and reviewing internal controls and risk assessments.
A set of key issues laid out by the FRC including close attention to liquidity risk and going concern considerations.
The paper says: 'Audit committees are likely to examine in more detail the rigour with which the analysis supporting the going concern judgment has been made and the integrity of the disclosures about going concern in the financial statements and other market communications.'
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