You and your senior auditor are auditing VAX LLC Muscat. Your senior auditor asked you to check whether there is any doubt over VAX LLCs ability to continue as going concern. You know that you may have to check multiples details to ensure the ability to continue as going concern like if there is any abnormal fluctuation in key financial ratios or variables, future risk prospectus of the business etc. You evaluated the pros and cons of various methods of evidence collection to verify the given assertion of use of going concern, you are not able to reach a conclusion on the methods to be used. You are scared of checking with your manager because u feel that he may undermine your capability. Finally one of your colleagues suggested you to go for analytical procedure as audit method to collect the required evidence for ability of a firm to continue as going concern.

1. Do you think analytical procedure will give you the best audit evidence in the above-mentioned assertion? Justify your answer.(2 Marks)

2. How would you collect audit evidence using analytical procedure related to going concern in your client? Illustrate your answer using the above case as an example.