Revising the going concern standard

The International Auditing and Assurance Standards Board (IAASB) has issued proposed revisions to its current standard on going concern, International Standard on Auditing 570 (Revised), Going Concern.

The proposed changes aim to:

  • Promote consistent practice and behaviour and facilitate effective responses to identified risks of material misstatement related to going concern.
  • Strengthen the auditorā€™s evaluation of managementā€™s assessment of going concern, including reinforcing the importance, throughout the audit, of the appropriate exercise of professional scepticism.
  • Enhance transparency with respect to the auditorā€™s responsibilities and work related to going concern where appropriate, including strengthening communications and reporting requirements.

IAASB Chair Tom Seidenstein (pictured) said: ā€œInvestors, regulators, and other stakeholders have repeatedly called for more robust audit procedures related to going concern and for increased transparency regarding that work in the auditorā€™s report.

ā€œThe revisions proposed today are a step in that direction. The proposals seek to strengthen going concern requirements by substantially enhancing the auditorā€™s work effort in relation to going concern and providing enhanced, entity-specific information in the auditorā€™s report.ā€

The IAASB has invited all stakeholders to comment on the proposed revisions via the IAASB website. Comments are requested by August 24, 2023.