Consider the auditor's evaluation and reporting of a company's ability to continue as a going concern in response to changes in financial reporting, the auditing environment, and stakeholder needs, including by considering how AS 2415, Consideration of an Entity's Ability to Continue as a Going Concern, should be revised.
The auditor's evaluation of a company's ability to continue as a going concern is an important part of an audit under PCAOB standards and federal securities law.
Changes to applicable financial reporting frameworks have established requirements for management to evaluate and disclose in the financial statements management's own assessment of the company's ability to continue as a going concern. These changes, and concerns from investors about the effectiveness of auditor going concern reporting, have prompted questions about the need for changes to AS 2415.
Staff analysis will take into account observations from the Board's oversight activities, audit firms' methodologies, academic research, recent reporting trends, the activities of other standard setters and regulators, and information from investors and other stakeholders.
The staff is analyzing relevant information and developing a proposal for the Board's consideration.