The going concern assumption means that management believes the company will continue in business
for the foreseeable future.
Procedures
Obtain the company's cash flow forecast and review the cash in and out flows.
Assess the assumption for reasonableness and discuss the findings with management to understand if
the company will have sufficient cash flows.
Review the company's post year end sales and order book to assess if the levels of trade are likely
to increase and if the revenue figures in the cash flow forcast are resonable.
Review any current agreements with the bank to determine whether any key ratio have been breached.
Review any bank correspondence to assess the likelihood of the bank renewing the overdraft facility.
Obtain a written representation confirming the director's view that xx is a going concern.