Betale Godt Ltd ("BG") is a prominent company in the credit card processing sector. It operated as a merchant bank, connecting retail merchants with cardholders' financial institutions like Commonwealth Bank and ANZ. Prior to the 2023 data breach, BG served over 200,000 retail merchants and ranked as the fifth-largest independent credit card servicer in Australia. The company relied heavily on the growing trend of consumers using credit cards for their purchases. For every hypothetical $100 credit card transaction, BG earned $2.98 in total revenue and $0.83 in gross profit. On Friday, July 7, 2023, the audit team arrived at BG's office and received the news that BG had expenenced a data breach. The exact nature and severity of the breach were not clear at that time, but the audit team considered it a significant concern for the audit engagement. It was discovered that hackers had gained unauthorized access to credit and debit card data starting from August 2022, but the company only became aware of this in July 2023. Considering that BG processed a substantial number of credit card transactions each year and the hackers potentially had access to several months' worth of data, it was likely that a significant portion of customers' credit and debit card numbers had been stolen. The audit team anticipated that BG, being a merchant bank, might bear the financial responsibility of reimbursing the credit card networks such as Visa and MasterCard for the expenses incurred in issuing new credit cards. The external audit team encountered significant challenges when assessing BG's ability to continue operating as a going concern, as reflected in their financial statements. Given the sensitive nature of the data breach, all discussions related to the data breach and the company's viability were conducted by the audit partner and manager in collaboration with BG's internal and external legal advisors. On one hand, there were multiple factors indicating the potential failure of the company as a going concern. Firstly, BG's stock price plummeted by more than 80 percent during the audit period, spanning from July 1, 2023, to the completion of fieldwork on September 1, 2023. Secondly, the announcement of the data breach led to increased trading volume for BG's stock, indicating heightened scrutiny from the capital markets. Thirdly, while same store sales had i previously shown growth, they experienced a decline of 3.1 percent in the fiscal year of 2022-23. Lastly, there was a significant risk of legal liability that could deplete BG's cash reserves and hinder its ability to raise additional capital. At that time, BG held approximately $40 million in cash and had stockholders' equity valued at around $184164 million. If faced with a similar liability as other data breach lawsuits, estimated at $274 million, the company could potentially face bankruptcy. On the flip side, the auditors had several reasons to believe that BG would remain a going concern. Firstly, the exact extent of legal liability expected in the following year remained uncertain. BG was confronting a securities class action lawsuit as well as lawsuits initiated by credit card companies. However, due to the unpredictable nature of the legal proceedings, it was unclear whether these lawsuits would be successful or resolved within a single calendar year. Secondly, the company did not experience a substantial loss of customers. BG made a noteworthy investment in its sales team, ensuring that they visited the merchants and provided reassurance that their business relationship would persist.