The AICPA’s Auditing Standards Board (ASB) issued Proposed Statement on Auditing Standards (SAS), The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern (Redrafted), resulting from its Clarity Project, to supersede SAS no. 59, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern, as amended (AICPA, Professional Standards, AU sec. 341 and AU-C sec. 570). The comment period ended Jan. 31.
Although the proposed SAS represents the redrafting of SAS no. 59 to apply the ASB’s clarity drafting conventions, the ASB decided to delay convergence of the proposed SAS with International Standard on Auditing (ISA) 570, Going Concern, pending FASB’s development of accounting guidance addressing going concern. FASB is expected to reissue an exposure draft on the topic in the first half of 2012. One significant change to existing standards is a requirement for the auditor to obtain written representations from management if conditions or events have been identified that indicate there could be substantial doubt about the entity’s ability to remain a going concern.
The proposal is available at tinyurl.com/cnptj7d.
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