For many organisations, the going concern assessment has traditionally been based on a relatively straightforward assumption — that if the business has sustained a profitable position, generated cash, maintained positive ratios and has demonstrated the ability to raise capital, it will continue to operate as expected over the following twelve months. In practice, this often resulted in a light‑touch assessment of going concern undertaken late in the reporting cycle, with limited challenge unless the organisation was experiencing obvious financial distress.
That approach is no longer sufficient.
Effective for audits of financial statements for periods commencing on or after 15 December 2026, changes to ASA 570 Going Concern have heightened expectations of management and auditors around how going concern assessments are performed, evidenced and analysed. While the standard is an auditing standard, its impact is felt most acutely by management and those charged with governance.
Management is now expected to actively demonstrate – not simply assert – why the business is expected to continue operating, supported by robust forecasts with justifiable assumptions, scenario analysis and clear documentation. Importantly, this higher standard applies even when financial performance appears stable, and there are no immediate liquidity concerns. It is no longer a matter of ‘business as usual,’ reflecting a clear shift from assumption to evidence.
ASA 570 has been revised in response to heightened stakeholder expectations following high‑profile corporate failures and an increasingly volatile macroeconomic and geopolitical environment. In pursuit of transparency and consistency, the standard has evolved to facilitate effective responses to risks of material misstatement in relation to going concern. It reinforces the auditor’s responsibilities in evaluating management’s assessment, with a clear emphasis on professional scepticism.
The auditor is required to remain more diligent in their responsibilities for challenging management’s assessment of going concern more rigorously, which will ultimately flow through to expectations imposed on management. The methods, judgements, assumptions and data presented by management will be subject to increased scrutiny, and timely, two-way communication throughout the audit engagement becomes paramount.
One of the most significant practical implications of the revised ASA 570 is timing. Going concern can no longer be viewed as a conclusion reached at the end of the audit, rather management is expected to engage with the assessment much earlier in the reporting cycle, ensuring that forecasts, funding plans and risk considerations are developed, refined and communicated to the auditor well before year-end.
The identification of events or conditions that may cast significant doubt on an entity’s ability to continue as a going concern underpins the current standard. However, the revision requires the consideration of these events on a gross basis, before consideration of any potential mitigating factors detailed within management’s future plans.
This creates a clear expectation for management to separately identify the risks and then evaluate whether mitigation plans are realistic and achievable.
ASA 570 requires auditors to evaluate how management arrived at its going concern conclusion with heightened scepticism and scrutiny. Management should expect to provide comprehensive evidence supporting:
The revised standard introduces enhanced requirements to reinforce the auditor’s evaluation of whether the financial statements adequately disclose the significant judgments made by management in concluding no material uncertainty exists.
This involves explicit statements in the auditor’s reports confirming that the auditor has fulfilled their responsibilities relating to going concern. For listed entities, disclosures in both the financial report and auditor’s report addressing material uncertainties must now include a more detailed description of how auditor’s evaluation was performed.
The revisions to ASA 570 reinforce a clear message: going concern is no longer a year-end presumption — it is a conclusion that must be comprehensively and meaningfully evidenced and actively governed. Early preparation will better support stakeholder confidence and a smoother year‑end process.
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