Your audit client, ABC Pty Ltd (ABC), has been assessed as having going concern problems due to a significant local customer (representing 60% of ABC's revenue) who has recently withdrawn their support of the business, as well as pressure from ongoing economic uncertainties in the Australian market, further impacting the client's cashflow. ABC's Directors' have indicated that they are currently disposing of some of their surplus assets to stimulate further cashflow, as well as exploring an extension to the due dates on their existing loan contracts, in order to alleviate the going concern issues. a) Discuss the audit evidence that you would need to obtain for each of the two (2) mitigating factors indicated above. b) Identify three (3) relevant additional mitigating factors that could be considered in relation to ABC's situation.

Your audit client, ABC Pty Ltd (ABC), has been assessed as having going concern problems due to a significant local customer (representing 60% of ABC's revenue) who has recently withdrawn their support of the business, as well as pressure from ongoing economic uncertainties in the Australian market, further impacting the client's cashflow. ABC's Directors' have indicated that they are currently disposing of some of their surplus assets to stimulate further cashflow, as well as exploring an extension to the due dates on their existing loan contracts, in order to alleviate the going concern issues. a) Discuss the audit evidence that you would need to obtain for each of the two (2) mitigating factors indicated above. b) Identify three (3) relevant additional mitigating factors that could be considered in relation to ABC's situation.

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter5: Corporate Ethical Governance & Accountabililty

Section: Chapter Questions

Problem 14.6EC

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