Going Concern going downhill

Hi Syam,

The Going Concern assumption clearly got rebutted the moment thecompany decided to wind up its business. Has the company passed aresolution authorizing the Board to dispose off the company'sassets?As an auditor, in the event, you're supposed to follow SA 570 akaAAS 16 titled "Going Concern". Since the Going Concern is no longervalid here, the question before you is how to go about signing theaudit report. Had there been a Going Concern uncertainly, you wouldhave been advised to express a disclaimer of opinion. But now thatthe company has on record decided to call it a day, you'd be calledupon to express an opinion that properly brings this to light. Youshould go through the second-last para—numbered 18—of the SA 570.Deviating from the normal format of the audit report, you shouldunambiguously state that the going concern assumption, which happensto be one of the fundamental accounting assumptions—apart fromConsistency and Accrual—in the preparation of financial statements,no longer holds good in the case of the company.Do not state that subject to the fact of the GC being inappropriate,the financial statements present a true and fair view. That would beakin to a doctor issuing a health certificate to a patient: Subjectto the fact the patient has full-blown AIDS and is liable to die anymoment, he is maintaining good health!Thanks,CA Sanjeev Bedi--- In ICAI_CIRC_MEERUT_CA@yahoogroups.com, syamsunder v wrote:>> Dear Members,> I need clarification/suggestion in the following case.> A private Limited Company engaged in the business of Hospital,intends to wind up, as it wsa not able to do profitable business.In the meantime, it got a buyer who is prepared to buy all fixedassets consists of Plant & Machinery and Furniture & Fixtures. Inthe event if the company sells all its fixed assets, will it have aneffect on Going Concern concept. The company do not have anycurrent assets other than Cash & Bank balances and Deposits. If thegoing concern concept is going to be effected as per AccountingStandard, how the same has to be reported in Accounts.> kindly clarify.> Thanks> CA Syam Sunder V> Hyderabad