Corporate failures around the globe in recent years have brought the topic of going concern, that is an entity’s ability to continue its operations as a going concern, to the forefront. Ongoing economic uncertainties and the recent turmoil in the financial sector have put a spotlight on the topic, further emphasizing the need for a more robust audit standard on going concern.\nA proposed revised going concern standard\nIn April 2023, the International Auditing and Assurance Standards Board (IAASB) issued an Exposure Draft, Proposed International Standard on Auditing 570 (Revised 202X) Going Concern and Proposed Conforming and Consequential Amendments to Other ISAs. Changes to the standard are being proposed to improve clarity on the auditor’s evaluation of management’s assertions about going concern and strengthen communication regarding going concern assessments.\nIn Canada, we adopt International Standards on Auditing (ISAs) as Canadian Auditing Standards (CAS). In May 2023, the Canadian Auditing and Assurance Standards Board (AASB) issued our corresponding Exposure Draft proposing to adopt ISA 570 (Revised 202X) as CAS 570 without amendments.\nThere are many proposed changes to the going concern standard and the key proposed changes include:\n\n enhancing the risk identification and assessment requirements so they are consistent with those set out in Identifying and Assessing the Risks of Material Misstatement\n enhancing the auditor’s evaluation of management’s going concern assessment\n adding a requirement for the auditor to request management to extend its going concern assessment to cover at least 12 months from the date of approval of the financial statements if management has not already done so\n enhancing the auditor’s consideration of information related to management's going concern assessment that becomes available to the auditor after the date of the auditor's report but before the date the financial statements are issued\n adding requirements to enhance communications about going concern in the auditor’s report, including:\n \n the auditor’s conclusion on the appropriateness of management’s use of the going concern basis of accounting in preparing the financial statements\n a statement as to whether, based on the audit evidence obtained, the auditor has identified a material uncertainty related to events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern\n for audits of listed entities, requiring additional communications in the auditor’s report in certain circumstances, including:\n \n a reference to related disclosure(s) in the financial statements, if any\n a description of how the auditor evaluated management’s assessment of the entity’s ability to continue as a going concern.\n \n \n \n \n\nWe want to hear from you to ensure that the changes we are proposing are fit for purpose in the current and future macroeconomic and geopolitical environments.\n\n\n\nHaven't signed up yet? Subscribe now to join our growing audience of over 10,000 professionals who receive updates on the latest audit quality blogs as well as resources and professional development opportunities. SIGN ME UP!\nWhat's next? Tune into our outreach events to hear more\nThe blog only touches the surface of the proposed changes. You can hear more and share your views, by joining one (or more!) of these upcoming events:\n\n discussion sessions on Monday, June 26 (English) and Wednesday, June 28 (French)\n joint webinar featuring representatives from the AASB and the Canadian Public Accountability Board (CPAB).\n\nIn addition, you can follow this project on the FRAS Canada Going Concern project page or provide input:\n\n by responding to a short survey in ConnectFRASCanada.ca\n by submitting written comments to the AASB.\n\nKEEP THE CONVERSATION GOING\n\nIf you have any questions or thoughts you would like to share, email me.\nDisclaimer\nThe views and opinions expressed in this article are those of the author and do not necessarily reflect that of CPA Canada.