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ICAEW publishes a two-part guide on COVID-19 considerations for auditing going concern and reporting of material uncertainties

  • ICAEW (Institute of Chartered Accountants in England and Wales) (lt green) Image
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04 May 2020

The Institute of Chartered Accountants in England and Wales (ICAEW) Financial Reporting Faculty has published a two part guide for auditors covering COVID-19 considerations for auditing going concern, and how to report when a material uncertainty relating to going concern exists. The guide builds upon the Financial Reporting Council’s (FRC’s) March 2020 Bulletin for auditors which set out considerations for auditors in relation to COVID-19.

The first part of the guide provides advice for auditors when testing the going concern assessments of reporting entities impacted by COVID-19. It offers practical considerations in relation to ISA 570 requirements. It covers:

  • the going concern basis of accounting;
  • auditing going concern; and
  • concluding on going concern

The second part of the guide sets out the steps auditors need to take to ascertain whether material uncertainty disclosures in relation to going concern in the financial statements are adequate, and how these disclosures will then impact the audit report. It supplements the guidance in the Financial Reporting Faculty’s audit report guides. It covers:

  • determining whether there are material uncertainties;
  • determining whether disclosures are adequate;
  • how auditors should approach disclosures included within other information;
  • how to make the necessary changes to the auditor’s report;
  • how to report on key audit matters; and
  • what to do if the auditor concludes that disclosures are not adequate

A press release and the two part guide is available on the ICAEW website. Our news item on the FRC’s March 2020 Bulletin for auditors is here.

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