The ability of an entity to continue as a going concern is a fundamental principle in the preparation of financial statements. GASB Statement No. 56 establishes requirements related to management’s responsibilities for assessing going concern for state and local governmental entities.
In July, 2016, the Accounting Standards Board (ASB) released an exposure draft, Proposed Statement on Auditing Standards, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern, to supersede SAS No. 126. It is the ASB’s strategy to converge its standards with those of the International Auditing and Assurance Standards Board (IAASB).
Therefore, in developing SAS No 132, the ASB used ISA 570 as a base. Overall, respondents to the exposure draft supported the ASB’s proposal to update SAS No. 126 in light of the impending effective date of FASB ASU No. 2014-15.
VACo Contact: Vicky Steinruck, CPA