AFM 451 Lecture Notes - Lecture 18: Engagement Letter, Accounting, Management Consulting

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM 451
• Professor: James Wainberg

Document Summary

Lecture 18: going concern, auditing of accounting estimates, and other assurance services (ch. Under the going concern assumption, an entity is viewed as continuing in business for the. Gaap are based on the going-concern concept so when an auditor says f/s are in conformity with. Gaap it means that continued existed may be presumed for a reasonable time (at least 1 yr) The auditor"s responsibility is to obtain saae about the appropriateness of management"s use of the going concern assumption in the preparation of the financial statements and to conclude whether. There is a material uncertainty about the entity"s ability to continue as a going concern. According to cas 570, when performing the risk assessment procedures, the auditor shall consider whether there are events or conditions that may cast significant doubt on the entity"s ability to continue as a going concern. Loan defaults: negative trends in operating results, denial of supplier credit, uneconomical long-term commitments (bad deals)