Surgent's Going Concern Uncertainty: Complying with the New Requirements When Preparing or Reporting on Financial Statements (AAGC)

Description

One major objective of financial reporting is to ensure that financial statement users have complete information to make reasonable financial decisions, including the likelihood and magnitude of future events and outcomes on the uncertainty of the current financial picture. ASU 2014-15 related to going concern disclosure was fully effective for fiscal years ending on or after December 15, 2016, and interim periods thereafter. This new accounting standard is applicable to all entities that prepare financial statements under U.S. GAAP, regardless of whether the entity undergoes an audit. In fact, an entity that merely receives a compilation or review report on special purpose framework financial statements (like cash or income tax basis) could be impacted by newly-required disclosure of going concern uncertainty. In addition, SAS No. 132 was also recently issued for updating the auditor's responsibility for evaluating going concern uncertainty in a financial statement audit. SAS No. 132 is effective for audits of periods ending on or after December 15, 2017.

Highlights

• Current FASB accounting standards related to going concern, including the new requirements of ASU 2014-15
• Evaluating risk of material misstatement in financial reports related to improper presentation and disclosure of going concern uncertainty
• The responsibility of an independent accountant for evaluating going concern uncertainty under various levels of engagement to perform attest and nonattest services
• New requirements of SAS No. 132 related to an auditor’s responsibility for considering going concern uncertainty 

Objectives

• Discuss red flags indicating possible going concern uncertainty
• Differentiate between the external accountant’s and management’s responsibility related to identifying, evaluating, presenting and disclosing going concern uncertainty
• Discuss how to obtain sufficient appropriate evidence to evaluate management’s assertions about an entity’s ability to continue as a going concern for a reasonable period of time
• Describe the independent accountant’s report options under preparation of financial statement, compilation, review and audit engagements when uncertainty associated with going concern exists

Designed For

Practicing CPAs and accounting professionals in business and industry that prepare, compile, review or audit financial statements