Going Concern Indicators
The going-concern indicators the standards list, measured from the ledger: losses, recurring losses, net current liabilities, net liabilities, short-term debt above cash and cash runway.
- General ledger alone
- Compares with last year
- Key analysis in Completion
How the result is read
Management evaluates going concern over one year from issuance (ASC 205-40) or twelve months from approval (ISA (UK) 570); the auditor evaluates that evaluation. The financial indicators the standards list can be measured from the ledger: losses, recurring losses, net current liabilities, net liabilities, debt falling due without the cash to meet it, a short cash runway. Present indicators direct the auditor to management's plans and their feasibility.
The worksheet, on the demo engagement
Going Concern Indicators, as the application draws it for Harrow Precision Engineering Ltd, the fictional demo engagement — one row per indicator.
Illustration. A loss-making year with seven months of cash: management's plans need evaluating.
Result grid3 rows
| Indicator | Measure | Threshold | Status | Reference |
|---|---|---|---|---|
| Loss for the year | -412,800.00 | a loss | Present | ASC 205-40; AU-C 570; ISA (UK) 570 |
| Cash runway under twelve months | 7.4 | months of cash at this year's average net outflow | Present | ASC 205-40; AU-C 570; ISA (UK) 570 |
| Net liabilities | 215,300.00 | net assets below nil | Not present | ASC 205-40; AU-C 570; ISA (UK) 570 |
In the application
Going Concern Indicators is filed under Completion, index letter L. "Run all analyses" runs it with every other analysis the ledger can answer. The worksheet states the population it tested on its face — or "Not applicable" with the reason when a column it depends on is empty — and the Excel workbook the engagement exports files it under L, beside an index of the source files with their SHA-256 fingerprints.
Read it with
Run your next audit file test without the Excel crash.
One free engagement to evaluate, valid 60 days. The ledger never leaves the machine.
- 20 minutes
- Runs on a fictional engagement
- No client data required