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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Subsequent events and going concern

While auditing Tarn Co, the auditor identifies events that may cast significant doubt on going concern. Which of the following is a required additional audit procedure under ISA 570 (Revised)?

The auditor must obtain written representations from management, and where applicable those charged with governance, about their plans for future action and the feasibility of those plans, as part of the additional procedures under ISA 570 (Revised).

  1. AObtaining written representations from management and, where applicable, those charged with governance regarding their plans and the feasibility of themCorrect
  2. BNotifying the regulator immediately in every case
  3. CReplacing the engagement quality reviewer
  4. DReducing materiality to nil for the remainder of the audit

Explanation

ISA 570 (Revised) requires additional procedures when events or conditions are identified, including evaluating management's plans, analysing cash flow forecasts where relevant, considering new facts after the assessment, and obtaining written representations on plans and their feasibility. Notifying regulators is not automatic, and changing the reviewer or setting materiality to nil is not required.

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