Scope of application
01. This Auditing Standard specifies and guides the auditor's and the firm's (hereinafter referred to as "auditor") 's responsibility in judging the assumption of ongoing performance of management. Audited Financial Statements are used for the preparation and presentation of the audited financial statements.
Assumes continuous operation
02. Under the continuous operation assumption, a unit is considered to be in continuous operation for the foreseeable future. General-purpose financial statements are prepared on a continuing basis, unless management intends to or otherwise requires that the entity be suspended or dissolved. Special-purpose financial statements may or may not be prepared under a continuing operating basis or under a regulated financial reporting framework (e.g. continuous establishment). may not be consistent with financial statements prepared for tax purposes). Where appropriate when using the continuous operating assumption for the preparation and presentation of the financial statements, assets and liabilities are recognized on the basis that the entity can realize the asset value and payment. received its liabilities under normal business conditions (refer to paragraph A1 of this Standard).
Responsibility in evaluating the continuous performance of the unit
03. The financial reporting framework may specify that management is required to undertake a specific assessment of the entity's continued performance and relevant standards to consider, and The disclosed information must be presented in relation to continuous operation. For example, Vietnamese Accounting Standard 15 (21) paragraph 2003 requires management to assess the entity's ability to continue to function. Laws and regulations may also address management's responsibility in evaluating the entity's ability to continue to function and related financial statements disclosures.
04. The financial reporting framework may not provide a clear requirement for management to undertake a specific assessment of an entity's continued performance. However, because the continuous operation assumption is a fundamental principle in the preparation and presentation of the financial statements (as set out in paragraph 02 of this Standard), the preparation and presentation of the financial statements are required by the Board. A director is required to assess the entity's ability to continue to function even if the financial reporting framework does not clearly state this.
05. Management's assessment of the entity's ability to continue to function in relation to the exercise of judgment at a given point in time of future uncertain outcomes of events. or condition. Factors related to that judgment include:
- The further an event, condition or outcome that occurs at a time in the future, the greater the degree of uncertainty about the outcome of that event or condition increases. As a result, most financial reporting frameworks that require management's assessment specify the period during which management must consider all available information during management. there;
The size and complexity, characteristics and operating conditions of the entity, as well as the degree to which the entity is affected by external factors can all influence judgments regarding the outcome of events. conditions or conditions;
- Any judgment about the future is based on information available at the time of judgment. Subsequent events may result in results that differ from judgments that were deemed reasonable at the time of judgment.
Responsibilities of auditors
06. The auditor's responsibility to obtain sufficient appropriate audit evidence about the reasonableness of the continuity assumption that management has used when preparing and presenting the financial statements and conclude whether there are still any significant uncertainties related to the ability of the entity to operate continuously. This responsibility is retained by the auditor even if the financial reporting framework used to prepare the report does not provide a clear requirement for management to undertake a specific performance assessment. unit continuity.
07. However, as discussed in VAS 200, the auditor's ability to detect material misstatement has inherent limitations, but the potential effect of these limitations is greater. for future events or conditions that may result in the failure of the unit to function continuously. These events or conditions cannot be predicted by the auditor. Therefore, when the auditor's report does not address the uncertainty of the entity's ability to continue, it does not mean that the entity's ability to continue to function has been. guaranteed.
08. The auditor and the firm shall comply with the requirements and instructions of this Standard in the auditing of the financial statements.
The entity (the customer) and the parties using the results of the audit shall have the necessary understanding of the requirements and requirements contained in this Standard in order to perform their responsibilities and to coordinate their work with The auditor and firm address relationships during the judgment of ongoing activity when auditing financial statements.
09. Objectives of auditors and auditing firms are:
(a) Obtain sufficient appropriate audit evidence about the reasonableness of the continuity assumption that management used when preparing and presenting the financial statements;
(b) Based on the audit evidence obtained, conclude as to whether there are still material uncertainties related to the events or conditions that could lead to a significant doubt about the possibility. continuous operation of the audited entity;
(c) Determination of impact on the audit report.