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5 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Going concern - if can't be going concern and financials not prepared appropriately OR financials are appropriate |
issue 2. Identify at least 4 going concern issues 3. Conclude on issue 4. Mgmt needs to prepare assessment of going concern 1.identify going concern issue2. Identify at least 4 going concern issues3. Conclude on issue4. Mgmt needs to prepare assessment of going concern5. Give 3 audit procedures to gain evidence of going concern (obtain forecasts , inquire future plans, bank financing)6. 2 impacts on audit report to gain evidence of going concern (obtain forecasts , inquire future plans, bank financing)
CAS 570- 3 rules (see note) +Adverse opinion OR unqualified opinion with emphasis of matter paragraph |
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A.R. IFRS 9 |
1. AR must be tested at year end 2. Analyze possible impairment 3. Recommend recording impairment 4. Discuss impact of issue on f.s.(current ratio , covenant) |
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Intangible asset impairment: key customer lost, competition offers similar patent tech. what is recoverable Amt? |
1. Identify issue - IAS 36 says to assess impairment at end of year with case facts 2. 36.18: recoverable amount is Fv less cost to sell. 3. Value in use (use if no active market) 4. What is recoverable amount? 5. Recommend recording impairment 6. Impact on F/S (none on current ratio) IAS 36 |
IAS 36 |
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Pref. Shares. : Capital injection from parent recorded as pref. Sh. |
1. Give definition of liability. 2. Parent wants to be repaid 3.Should be recorded as a liability 4. Impact of current ratio is negative , affecting covenant |
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Covenant breach |
1. State covenant is imposed calculate the ratio before adjustments 2. Adjust assets for AR impairment adjust liabilities for current portion of loan. 3. Intangible asset won't affect current ratio 4. Recalculate the current ratio provide conclusion on compliance 5. Presentation of financial statements depends ongoing concern. This is evidence of going concern issue |
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