Audit and Assurance Assignment Example | Topics and Well Written Essays - 2500 words

Audit and Assurance - Assignment Example This assumption helps the organizations to be able to adequately finance its liabilities, realize its assets and seek refinancing if necessary. It is the duty of management to establish whether a business is a going concern, thus an auditor has to consider this implication on every audit they perform (Messier, Glover & Prawitt, 2008). The role of the auditor is segmented by giving reliable information on the performance of the business. An auditor has to review management assessment and the risks of material misstatements which touch on the business. An auditor is mandated with the task of assessing management opinions on the business as a going concern. It is this information which will add up to the data to be used by the auditor. Further, the auditor has to seek a written report regarding the future plans of the business from a management perspective. The auditor is required to review the information used by the clients who are basically the business management organs in establishing whether the going concern basis is appropriate. The financial statements offer a reference point of liquidity risk and going concern aspects. In cases of material uncertainty the auditor will be compelled to take a stand and make a decision. The auditor will make unqualified opinion if material uncertainty exists in the financial records. However, where the doubt has not been pinpointed in the financial statements the auditor will give a qualified opinion with a concrete explanation on the same (Messier, Glover & Prawitt, 2008). Auditors in trying to assess the operation ability of the entities need to take into perspective, this factor among other numerous factors to forecast and feed management with the right information to support going concern approach of the business. Periodicity is one of the key factors which need to be perceived by both management and the auditors in coming up with quantifiable clarifications. For instance, ISA 570 adopts a framework which