Point of view: Assessing going concern -- Stakeholders would benefit from clarity in U.S. disclosure requirements

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Point of view 12/17/2012 by Assurance services
Point of view: Assessing going concern -- Stakeholders would benefit from clarity in U.S. disclosure requirements

At a glance

During the recent economic downturn, some stakeholders were surprised to learn that companies faced liquidity issues. As a result, the FASB and PCAOB are currently revisiting the accounting and auditing guidance around going concern assessments. Our Point of view on assessing going concern highlights that a standard that will require a company to provide earlier and more frequent, scalable disclosures that increase if conditions deteriorate will benefit stakeholders. However, we recognize that the auditor's role under the existing auditing standards is important to stakeholders. We believe improvements in the reporting model will be achieved most effectively by accounting and auditing standard setters working together to develop complementary standards.

During the recent economic downturn, some stakeholders were surprised to learn that companies faced liquidity issues. As a result, the FASB and PCAOB are currently revisiting the accounting and auditing guidance around going concern assessments. Our Point of view on assessing going concern highlights that a standard that will require a company to provide earlier and more frequent, scalable disclosures that increase if conditions deteriorate will benefit stakeholders. However, we recognize that the auditor's role under the existing auditing standards is important to stakeholders. We believe improvements in the reporting model will be achieved most effectively by accounting and auditing standard setters working together to develop complementary standards.