Sign in to answer this question
2 answers to this question
The most relevant answers filter to the top...
"Going concern" means that auditors are working on the assumption that the company will not go bankrupt in the foreseeable future.
This is very important to auditors as all of their numbers are based on this assumption. The auditor's valuations of the business will significantly change if the business was about to go bankrupt.
If a business goes bankrupt, it may have to sell some of its assets at "fire sale" prices which will reduce their value. Thus, the auditors usually assume that the company will not go bankrupt which is called the going concern concept.
This is very important to auditors as all of their numbers are based on this assumption. The auditor's valuations of the business will significantly change if the business was about to go bankrupt.
If a business goes bankrupt, it may have to sell some of its assets at "fire sale" prices which will reduce their value. Thus, the auditors usually assume that the company will not go bankrupt which is called the going concern concept.
"Going concern" means that auditors are working on the assumption that the company will not go bankrupt in the foreseeable future.
This is very important to auditors as all of their numbers are based on this assumption. The auditor's valuations of the business will significantly change if the business was about to go bankrupt.
If a business goes bankrupt, it may have to sell some of its assets at "fire sale" prices which will reduce their value. Thus, the auditors usually assume that the company will not go bankrupt which is called the going concern concept.
This is very important to auditors as all of their numbers are based on this assumption. The auditor's valuations of the business will significantly change if the business was about to go bankrupt.
If a business goes bankrupt, it may have to sell some of its assets at "fire sale" prices which will reduce their value. Thus, the auditors usually assume that the company will not go bankrupt which is called the going concern concept.