Auditing Essay Example | Topics and Well Written Essays - 1500 words - 1

Auditing - Essay ExampleIn fact seasonal interruption are routine and regular and even after such(prenominal) interruptions business continue in normal course and thus entities pursuing seasonal business may be called passing play revive despite periodic seasonal interruptionIn this write up the issues relating auditors responsibility to assess the substantial doubt arising out of normal auditing procedures is considered in order to produce independent and effective reporting to the stakeholders.The assumption under the concept of going concern is continuity in normal course and such continuity of entity operations is usually assumed in financial accounting in the absence to contrary (Michael J Ramos, page 285)ii Auditors assess the going concern concept whenever substantial doubt is created while following regular and normal audit procedures.If there are no doubt neither directors nor auditor call for refer specifically to going concern in the financial statements or audit repor t. However, the Combines Code states that directors should report that the business is a going concern with musical accompaniment assumptions and qualifications as necessary. (Lain Gray and Stuart Manson, page 674)iiiGoing concern concept assumes an atmosphere of normalcy. Under the going concern concept the enterprise will continue in operational existence for a foreseeable future. (Nexia International, page 137)ivWhenever auditors have substantial doubts about the going concern concept it underlies that financial statements have not been disposed(p) under normal circumstances. This is because the going concern concept is unlikely to be compatible with the intention or necessity to enter into a scheme of rearrangement with the familys creditors, or make an application for an administrative order, or place the company in administrative receivership or liquidation.(Saleem Sheikh and William Rees, page 349)v In other(a) words results or status shown by