Going Concern
Financial Dictionary — Auditing
Definition
Going concern is the assumption that an entity will continue operating for the foreseeable future.
Detailed Explanation
Auditors assess whether there are events or conditions that may cast significant doubt on the entity’s ability to continue as a going concern.
Common Uses
- Used in audit planning to understand risks and design procedures.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
- Used during testing (controls/substantive) and documentation of audit evidence and conclusions.
Practical Example
- Example: The auditor references **Going Concern** when designing procedures and documenting conclusions in the audit file.
Why This Term Matters
- Why it matters: Supports high-quality, defensible audit conclusions and helps detect material misstatements and control weaknesses.