RSM423H1 Chapter Notes - Chapter 19: Point Estimation, Financial Statement
Document Summary
Gaap assumes continued existence of the enterprise for at least one year. Auditors must evaluate matters of financial analysis, business strategy, and financial forecasting. Evidence of financial difficulties or mitigating factors should be observed. Handle going-concern issues in the same manner as contingencies. The cpa canada research study, the going-concern assumption recommends five types of reports: Standard with additional explanatory paragraph: going-concern substantial issues are disclosed. Adverse: there is a failure to disclose substantial doubts, and gaap no longer applies. Qualification: the auditor encounters a scope limitation with respect to going-concern issues. Cas 540. 11: the auditor shall determine whether in the auditor"s judgment, any of those accounting estimates that have been identified as having high estimation uncertainty give rise to significant risks. A43 a44: not all differences between outcomes and estimates are due to misstatements but this seems to depend on the financial reporting framework. The amount of the estimate is not always an indicator of the estimation uncertainty.
