A going concern describes a business that functions without the intention or threat of liquidation for the foreseeable future, say at least within 12 months. Wall Street, Manhattan is the location of the New York Stock Exchange and is often used as a symbol for the world of business. ... Liquidation, or winding up, refers to a business whose assets are converted to money in order to pay off debt. ...

Use in Accounting

In accounting, "going concern" refers to a company's ability to continue functioning as a business entity. Accountants and auditors may be required to evaluate and disclose in the notes to the financial statements whether a company is no longer a going concern, or is at risk of ceasing to be one. It has been suggested that Accounting scholarship be merged into this article or section. ... Accountant, or Qualified Accountant, or Professional Accountant, is a certified accountancy and financial expert in the jurisdiction of many countries. ... Audit can refer to: Telecommunication audit Financial audit Performance audit Completion of a course of study for which no assessment is completed or grade awarded; especially audit is awarded to those who have elected not to receive a letter grade for a course in which letter grades typically awarded. ... The Notes to Financial Statements are additional notes and information added to the end of the financial statement to supplement the reader with more information. ...

Financial statements are prepared on the assumption that the entity is a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the normal course of operations. Different bases of measurement may be appropriate when the entity is not expected to continue in operation for the foreseeable future.^[1]

Use in Risk Management

If a public company reports that its auditors have doubts about its ability to continue as a going concern, investors are likely to take that as a sign of increased risk. Some fund managers may be required to sell the stock to maintain an appropriate level of risk in their portfolios. A negative judgment may also result in the breach of bank loan covenants. The word investor may refer to: A person who makes investments Investor AB, a Swedish investment company institutional investor corporate investor This is a disambiguation page, a list of pages that otherwise might share the same title. ... Lets talk about risk control strategies, anyone with more information and willing to share, please do so. ... This article does not cite any references or sources. ... Covenant, in its most general sense, is a word for a solemn contract or similar undertaking. ...

References

1. ^ CICA Handbook Section 1000.58

See also

• ISA 570 Going Concern
• HKSA 570 Going Concern
• List of auditing topics

Financial auditing topics Confirmation Control risk Correctness Cut-off Detection risk Due diligence Engagement letter Existence External audit External auditor External confirmations Financial statement assertions Going concern Hong Kong Standards on Auditing Inherent risk Interim audit Internal audit Internal auditor Internal control International Federation of Accountants International Standards on Auditing...

External links

• Going Concern Evaluation by Solvency.com
• Glossary of Accounting Terms page ("going concern assumption").