The Going Concern Assumption : Critical Issues For Auditors Essays

876 Words Apr 27th, 2016 4 Pages
The article titled “The Going Concern Assumption: Critical Issues for Auditors” written by Bor-Yi Tsay and Sean Chen found in the CPA Journal talk about the going concern issue to how it affects auditors and the challenges that auditors risk in issuing a going concern or not. As Bor-Yi and Sean Chen focus on this article “is to present the relevant issues surrounding the topic of the going concern assumption in financial reporting and auditing.” Bor-Yi and Sean Chen started their article by talking about that the going concern assumption has been under review for the past decade due to many businesses going bankrupt these last ten years such as General Motors and with Enron and WorldCom. To begin, on the issue of going concern is that in August 2014 the FASB released “ASC subtopic 205-40 of the “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Second, the standards that auditors must follow are SAS 59 “The Auditor 's Consideration of an Entity 's Ability to Continue as a Going Concern” as with the updated version SAS 126 of this relating to going concern. Third, that Bor-Yi and Sean Chen talked about in the beginning of their article was about how businesses outside the United States follow International Financial Reporting Standards rather than Generally Accepted Accounting Standards to also have a section on going concern in which is IAS 1 and with that, auditors must follow ISA 570 of the International Standard on Auditing.…

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