Question
I have been asked to review the IBISWorld reports for two companies that we are considering taking over the audit for in 2025. When preparing
I have been asked to review the IBISWorld reports for two companies that we are considering taking over the audit for in 2025. When preparing financial reports, management is required to make an assessment of an entity's ability to continue as a going concern (AASB 101, 2007) and to make adequate disclosure in the financial reports where such uncertainties are identified. These are OD5610 - Environmental Consulting in Australia (Company A) and B0919 - Rock, Limestone and Clay Mining in Australia (Company B). I have reviewed these reports and have reported three issues for Company A and three issues for Company B that arose during my review. In the essay below, I have presented these issues for each company and suggested a business environment risk for each company......
Company A business environment risk issue 1 details. How is the business environment in this sector? Are there any going concern issues that could come from Company A being involved in this sector?
Perhaps quote Australian Auditing Standards (ASA 570) require the company's auditors to evaluate management's assessment of the company's ability to continue as a going concern within the relevant period. (ASA 570, 2007). Describe issue and why important.
Company A business environment risk issue 2. Any change in Company A's business regulation or economic aspects? Describe change. Perhaps note that ASA 315 (2022) requires auditors must consider the entity's
Changeresults from events or conditions that, over time, affect the entity's business
or the economic, accounting, regulatory, industry or other aspects of the environment
in which it operates, when the effects of those events or conditions are reflected in the
required information". (ASA 315 Appendix 2, 2022, p.77)
Company A business environment risk issue 3. Describe issue and why important for Company A
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