Auditors still responsible for going concern evaluation under PCAOB rules
Recent changes to U.S. GAAP do not change public company auditors’ responsibilities for following existing PCAOB standards when considering a company’s ability to continue as a going concern, the PCAOB said Monday.
In a staff audit practice alert, the PCAOB said current auditing requirements remain in force in light of FASB’s release in August of a standard defining management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern.
“An auditor’s responsibility to evaluate a company’s ability to continue as a going concern is an important part of the audit,” PCAOB Chief Auditor and Director of Professional Standards Martin Baumann said in a news release. “With the recent changes to U.S. GAAP, the staff is issuing this alert to make clear that current auditing standards remain in effect.” Read more on the Journal of Accountancy.