Audit risks

In this lesson

1. 0:00 Going Concern and Audit Reporting
2. 0:44 Identifying Going Concern Risk Indicators
3. 1:28 ISA 570 and Auditor Responsibilities
4. 3:56 UK Disclosure Requirements for Going Concern
5. 5:07 Compulsory Liquidation: Procedures and Consequences

About this lesson

You'll understand the different audit report outcomes—from unmodified opinions to adverse opinions—depending on how going concern issues are disclosed, and you'll see how ISA 570 (revised 2019) strengthened auditor responsibilities to challenge management's going concern assumptions more robustly. The video walks you through the key audit procedures auditors must perform: testing whether non-current assets show impairment risk, checking inventory recoverability, verifying financial support from parent companies, and scrutinising management forecasts for bias. You'll learn why auditors must now make an overt statement in their report confirming they've assessed going concern, rather than simply staying silent on the issue. Using a practical scenario involving a company facing severe working capital problems, you'll see how these concepts apply in real situations. The lesson also covers the consequences of compulsory liquidation for creditors, employees, and shareholders—essential context for understanding why going concern assessment matters so much to all stakeholders. This knowledge is directly relevant to your Audit and Assurance studies and exam preparation.

Duration: 8m