APB ramps up calls for 'going concern' perspective

The Auditing Practices Board has echoed calls for companies and auditors to take the unprecedented markets crisis into account when arriving at going concern assumptions.

The financial community is bracing itself for a tough annual reporting season in the wake of the financial upheaval and in releasing a bulletin on going concern issues today, APB chairman Richard Fleck said:

'The current difficult economic conditions do not of themselves necessarily mean that a material uncertainty exists about an entity’s ability to continue as a going concern, or justify auditors modifying their auditor’s report to draw attention to going concern.'

The APB, part of the Financial Reporting Council, decided to draw more attention to going concern after the UK regulator put out exhaustive guidance on the topic last month.

'Auditors should judge the need to draw attention to going concern uncertainties in their auditor’s reports on the basis of the facts and circumstances of the particular entity,' Fleck added.

The FRC urged companies to devote plenty of time to going concern disclosures, but also appeared to ask auditors to give some leeway with their opinions.

'Auditors will need to ensure that they fully consider going concern assessments
and only refer to going concern in their audit reports when appropriate,' the FRC said.

Read the full APB bulletin here