U.S. accounting rulemakers are expected to revisit soon a 2008 proposal that would address the knotty issue of “going concern” warnings, seeking to better assure that alarms are sounded before companies fail.
At issue are the standard warnings that auditors are required to include in annual reports when they have substantial doubt that a company will survive.
With lucrative audit fees on the line, auditors have been accused of failing to flag going concern doubts, though some proposed changes could create new frictions between auditors and managers, some experts have said.
The 2008 Financial Accounting Standards Board proposal contemplates making companies themselves responsible for warning when there is a risk that they may not be able to continue as a going concern. In the past, this job has been mostly the duty of their auditors.
Read the complete article here: FASB weighs ‘going concern’ self-test for US firms | Reuters.
