[Jasper]

The following MCQ on WTB was marked incorrect by Wiley, but I believe I did answer it correctly:

Under ISA, the time horizon for a going concern is:

The correct answer per Wiley is: At least 12 months from the date of the auditors report.

I picked: …………………………… At least 12 months from the date of the financial statements.

I did a little internet research and found this on ISA regarding going concern issues:

Ordinarily the applicable financial reporting framework, or sometimes relevant law or regulation, specifies the minimum time period that management is expected to consider when making its assessment. IAS 1, for example, requires that “management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the balance sheet date.”

Would anybody know why Wiley would mark this incorrect considering the above excerpt?

FAR 82
BEC 82
AUD 93
REG 87

[acamp]

In practice I've always seen 12 months from the audit report date–12 months from the B/S date seems weird because that creates a highly variable range. But that paragraph you found seems to contradict the WTB answer. Hmmm…

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[acamp]

In practice I've always seen 12 months from the audit report date–12 months from the B/S date seems weird because that creates a highly variable range. But that paragraph you found seems to contradict the WTB answer. Hmmm…

Ninja + Wiley Test Bank: [FAR - 81] [REG - 76] [BEC - 88] [AUD - 73](doh!)

Becker Videos: [AUD - 82]

California CPA

[Jasper]

@ acamp,

I am under the impression when considering SAS, “Auditors are required to consider whether there is substantial doubt as to whether an entity will continue as a going concern for a reasonable period of time not to exceed one year from the date of the financial statements”

I still would like to find literature that supports Wiley's statement on the ISA regarding going concerns, but so far I am finding literature to the contrary.

FAR 82
BEC 82
AUD 93
REG 87

[Jasper]

@ acamp,

I am under the impression when considering SAS, “Auditors are required to consider whether there is substantial doubt as to whether an entity will continue as a going concern for a reasonable period of time not to exceed one year from the date of the financial statements”

I still would like to find literature that supports Wiley's statement on the ISA regarding going concerns, but so far I am finding literature to the contrary.

FAR 82
BEC 82
AUD 93
REG 87

[Anonymous]

I've always heard the 12 months from the balance sheet as well. BUT IAS 1 is from IFRS not ISA. There is a difference there.

[Anonymous]

I've always heard the 12 months from the balance sheet as well. BUT IAS 1 is from IFRS not ISA. There is a difference there.

[Jasper]

I just found this

1. Under US auditing stds, period should not exceed 1 year from date of FS being audited.

2. Under ISA, period should be at least, but not limited to 12 months, from B/S date.

3. If there is doubt about going concern the auditor should state this in an explanatory paragraph after the opinion paragraph

FAR 82
BEC 82
AUD 93
REG 87

[Jasper]

I just found this

1. Under US auditing stds, period should not exceed 1 year from date of FS being audited.

2. Under ISA, period should be at least, but not limited to 12 months, from B/S date.

3. If there is doubt about going concern the auditor should state this in an explanatory paragraph after the opinion paragraph

FAR 82
BEC 82
AUD 93
REG 87

[leafs43]

Sounds like this is just one of those “best answer” type of questions.

I may actually agree with Wiley on this as something like subsequent events which occur after the balance sheet date but before the auditor's report can affect going concern and an auditor still has a responsibility if it is on the auditor's report.

[leafs43]

Sounds like this is just one of those “best answer” type of questions.

I may actually agree with Wiley on this as something like subsequent events which occur after the balance sheet date but before the auditor's report can affect going concern and an auditor still has a responsibility if it is on the auditor's report.

[Author]

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