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<p>This paper addresses a underlying assumption of financial statements: going concern assumption. The going concern assumption constitutes a foundational premise presuming that the entity will conduct its operations in the forthcoming period (at least 12 months) without significant risk of business interruption. The primary objective of financial reporting is to provide information regarding the entity's financial position and performance to diverse users. Management is obligated to apprise users, and auditors are tasked with scrutinizing the assertion that the entity will continue its operations for a period exceeding 12 months. This paper meticulously examines the regulatory framework grounded in International Financial Reporting Standards and International Standards on Auditing. It particularly scrutinizes the role and significance of auditors in assessing the going concern assumption, encompassing an analysis of factors influencing the auditor's opinion on the going concern assumption and addressing criticisms directed at auditors. Furthermore, the paper explores past experiences in developing models for evaluating going concern assumptions, potentially aiding forensic accountants in uncovering irregularities in financial statements, given the correlation between a heightened bankruptcy risk and fraudulent activities.</p>
</abstract>

This paper addresses a underlying assumption of financial statements: going concern assumption. The going concern assumption constitutes a foundational premise presuming that the entity will conduct its operations in the forthcoming period (at least 12 months) without significant risk of business interruption. The primary objective of financial reporting is to provide information regarding the entity's financial position and performance to diverse users. Management is obligated to apprise users, and auditors are tasked with scrutinizing the assertion that the entity will continue its operations for a period exceeding 12 months. This paper meticulously examines the regulatory framework grounded in International Financial Reporting Standards and International Standards on Auditing. It particularly scrutinizes the role and significance of auditors in assessing the going concern assumption, encompassing an analysis of factors influencing the auditor's opinion on the going concern assumption and addressing criticisms directed at auditors. Furthermore, the paper explores past experiences in developing models for evaluating going concern assumptions, potentially aiding forensic accountants in uncovering irregularities in financial statements, given the correlation between a heightened bankruptcy risk and fraudulent activities.

Going concern assessment: a literature review

Journal of Forensic Accounting Profession

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Going concern assessment: a literature review"}

This paper addresses a underlying assumption of financial statements: going concern assumption. The going concern assumption constitutes a foundational premise...

Going concern assessment: a literature review

Publié en ligne: 26 janv. 2024

Pages: 48 - 62

Reçu: 29 nov. 2023

Accepté: 21 déc. 2023

DOI: https://doi.org/10.2478/jfap-2023-0009

Mots clés
going concern, financial statements, bankruptcy, forensic accounting, bankruptcy models

© 2023 Mahir Proho, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Going concern assessment: a literature review

Publié en ligne: 26 janv. 2024

Pages: 48 - 62

Reçu: 29 nov. 2023

Accepté: 21 déc. 2023

DOI: https://doi.org/10.2478/jfap-2023-0009

Mots clésgoing concern, financial statements, bankruptcy, forensic accounting, bankruptcy models

© 2023 Mahir Proho, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Mots clés
going concern, financial statements, bankruptcy, forensic accounting, bankruptcy models