Standards in Focus
The revised Canadian Auditing Standard (CAS) 570, Going Concern
Why has the Standard Changed?
Recent corporate failures, and increased expectations from investors and stakeholders have highlighted the need for more robust and transparent evaluations of an entity’s ability to continue as a going concern.
International Standard on Auditing (ISA) 570 (Revised 2024), Going Concern, strengthens the auditor’s responsibilities, enhances consistency in audit practices, and improves communication with stakeholders.
As part of Canada’s adoption of the ISAs as Canadian Auditing Standards (CASs), the Auditing and Assurance Standards Board (AASB) has issued revised CAS 570, Going Concern. This revised Canadian standard is fully aligned with ISA 570 (Revised 2024), with no Canadian amendments.
What do CPAs Need to Know?
Under the revised CAS 570, auditors shall perform more rigorous and timely risk assessments, consistently evaluate management’s going concern assessment in all cases, and place increased emphasis on considering potential management bias. The auditor shall also evaluate management’s going concern assessment for a period of at least 12 months from the date of approval of the financial statements.
Additionally, the standard enhances transparency by requiring clearer auditor reporting and improved communication with those charged with governance throughout the audit engagement for matters pertaining to going concern.
Acknowledgement and credit to CPA Ontario for providing this original content material.
Standards in Focus - The revised Canadian Auditing Standard (CAS) 570, Going Concern